AI Drafter 
TaxTMI 
TaxTMI 
2017 (10) TMI 660
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....ated 22.11.1999 exempts payment of excise duty on perfumery compound manufactured by the respondent; and (ii) Whether actual marketing of the perfumery compound is necessary for the levy of excise duty. 2. The respondent is a manufacturer of agarbathi perfumes. The agarbathi perfumes are odoriferous compound prepared by the respondent in its Bangalore unit and then transported to its Mysore unit, where it is applied to agarbathis to complete the process of manufacture of agarbathis. The respondent was paying excise duty with respect to these odoriferous compounds till March 2001 as this substance is covered under Chapter Sub-Heading 3302.90 of the First Schedule to the Central Excise Tariff Act, 1985. The Central Board of Excise....
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.... of the said orders in these appeals. 4. Appearing for the Revenue, Sri P.S. Narasimha, learned Additional Solicitor General, submits that the rate of duty to be paid on the perfumery compounds is clearly mentioned under Chapter Sub-Heading 3302.90 of the First Schedule to the Central Excise Tariff Act, 1985 and it is on this rate that the respondent used to pay duty till March, 2001. The respondent is, therefore, not entitled to the benefit under the ambit of the circular dated 22.11.1999. The respondent does not manufacture agarbathi as per the general practice which has been contemplated under the circular dated 22.11.1999. The respondent manufactures perfumery compounds in its Bangalore unit and then transports them to its Mysore uni....
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....h is used in manufacture of agarbathis sold in the market. The Board vide its circular clarified that such odoriferous compound mixed with dough is not excisable. For better understanding, the Board's circular is as under: "The Board's Circular No.495/61/99-CX.3 dated 22.11.1999: Subject: Excisability of Odoriferoous compound/Agarbathi mix arising during the course of manufacture of Agarbathi - Regarding. It has been brought to the notice of the Board that field formations are demanding duty on the compound preparation arising during the course of manufacture of Agarbathi classifying them under Heading 3302.90 of the Central Excise Tariff as odoriferous compound. 2. The matter has been examined in the Boa....
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....tic chemicals (perfumes) which is also classifiable as odoriferous compound, under Central Excise Tariff and comes into existence during the course of manufacture of agarbathis, in a continuous process, as an intermediate product. The circular clarifies that odoriferous substances are not marketable because these products are not sold by manufacturers in order to protect their trade secret. The circular by way of illustration also stated that the whole process of manufacturing agarbathi, that is preparation of the odoriferous compounds and their mixing with the dough or agarbathi is normally carried out in a continuous manner since the whole process is continuous. These odoriferous substances do not remain with the manufacturer to be sold i....
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....t be said that the agarbathi compound manufactured by the respondent is covered under the aforesaid circular. 11. The next question for consideration is whether actual marketing of the perfumery compound manufactured by the respondent is necessary for the levy of excise duty. It is settled that to hold the product as excisable/dutiable, actual marketing/sale of goods is not necessary. What is required to be proved is that the capability of marketing the product. Marketability is decisive test for dutiability. Whether the goods are, in fact, marketed or not is of no relevance. It is also not necessary that goods in question should be generally available in the market. Even if the goods are available from only one source or from a specifie....