AI Drafter 
TaxTMI 
TaxTMI 
2018 (1) TMI 1535
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....e. 2. The brief facts as per show cause notice is, the appellant is engaged in the manufacture of Poly Propylene Multi Filament Yarn (PPMFY) falling under Chapter heading 54026930 and Narrow Woven Fabrics (NWF) falling under Chapter Heading 58063700 of Central Excise Tariff Act, 1985. That Narrow Woven Fabrics (NWF) is chargeable to NIL rate of duty as per Notification No. 30/2004 dated 9.7.2004 and for the manufacture of the said NWF, the appellant was using Poly Propylene granules, master batch of spin finish oil as inputs. During the course of manufacture of finished goods, an intermediate product (PPMFY) was also manufactured, which is being captively consumed in the process of manufacture of NWF. Now, the case of the Department is, ....
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....n the stage it is generated, is not marketable because being integral and inter-winded in a continuous process, the yarn threads are still open with oil contact and are not even open at the stage of being coned or paper coned or paper tubed' and still the said product are bound in loose form in heavy iron bobbins, which still was to undergo subsequent operation and the product is in semi-finished form. The said product as alleged by the department, fails the test of marketability because the said intermediate product which is claimed liable to duty, cannot be marketed in any manner, in the condition in which it emerges. Only on presumption it cannot be alleged by the department that the said intermediate product could be marketed by the app....
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....ection 3 of Central Excise Act, 1944. Further, reliance is placed on the case of Hon'ble Supreme Court in the case of CCE, Baroda v. United Phosphorus - 2000 (117) ELT 529 SC wherein the Hon'ble Apex Court had held as follows: Dutiability- Marketability - Intermediate products coming into existence in the course of manufacture of pesticides - No product is "goods" unless shown to be marketable by the Department - Mere specification in the dictionary, excise tariff and Drawback Rate schedule is of no consequence - Department's appeal dismissed - Sections 2(d) and 3 of Central Excise Act, 1944. Further, reliance is placed on the case of Cipla Ltd., v CCE Bangalore -2008 (225) ELT 403 para-11 wherein it was held that marketabili....
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.... the manufacture of goods and for an article to be "goods", there must be known in the market as such or they must be capable of being sold in the market as goods. Actual sale is not necessary. User in the captive consumption is not determinative of that the article is capable of being sold in the market or known in the market as goods. Even transient items of articles can be goods, provided that they were known in the market as distinct and separate articles having separate uses, there would still become goods if they were capable of being marketed even during the said short period. Thus the goods with unstable character can be theoretically marketable if there was a market of such transient type of articles but one has to take a practical....
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....s. Britannia Industries, M/s. J.B. Mangaram Food Industries and M/s. ITC Ltd. In our view this basis of holding that the goods, in question, are marketable is absolutely wrong, as it has been presumed that the sugar syrup being made by the appellants is identical to the "invert sugar syrup" being made by M/s. Dhampur Speciality Sugars Ltd. for which there is no basis. Chemically, invert sugar is obtained by Hydrolysis of cane sugar (sucrose, a disaccharide with specific rotation of + 66.5°) and the same is a mixture of glucose (with specific rotation of +52.7°) and fructose (with specific rotation of - 92°), with net specific rotation of - 19.7°. The process of hydrolysis of cane sugar (which is dextrorotatory i.e. with rota....
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.... sold - Section 3 of Central Excise and Salt Act, 1944. 5. The learned AR reiterated the findings of the impugned order and prayed for dismissal of appeal. 6. Having considered the rival contentions and perusal of records, we find that the appellants' unit is a composite unit and doing continuous manufacturing process wherein spinning of semi-finished PPMFY is being done followed by subsequent process like stretching, winding, warping and braiding is done on a needle loom. We also find that PPMFY in the stage it is generated is not marketable, being integrated and inter-winded in a continuous process, the yarn threads are still open with oil contact and are not even open at the stage of being coned or paper coned or paper tubed' and s....