1996 (8) TMI 107

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....us stages of the process of manufacture. To fully use caprolactam, which is expensive and duty paid, the appellants have installed equipment by which caprolactam is recovered from the aforementioned waste and re-cycled into the process. The Excise authorities sought to treat the process of separation of caprolactam from the waste as an independent manufacturing process, and subjected it to duty. The claim of the appellants for refund of such duty was rejected. The Collector (Appeals) upheld the rejection, as did the Customs, Excise & Gold (Control) Appellate Tribunal. Hence this appeal. 2.Caprolactam in flakes is used as the original raw material. The caprolactam that is recovered from the waste as aforestated is in molten form and, acco....

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....ious consideration to the arguments advanced on both sides and perused the records. It is evident from the record that both the authorities below have proceeded to determine the excisability of the product based on process of manufacturing activity, without considering the important point about marketability of the product in determining the goods for the purpose of levy of excise duty. The material which is sufficient for the purpose of holding that there is manufacturing activity and emergence of a separate product are not sufficient for the purpose of coming to the conclusion about the marketability of the product. The Department has not brought on record any evidence to show that these goods were either sold or marketable as such. On th....

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....ion of the Apex Court, we have no other alternative except to hold that the goods in question are not liable to excise duty." 5.In the case of L.M.L. Ltd., the Tribunal followed its order in the case of Jagatjit. In both cases it was held that the caprolactam that was recovered from waste was not liable to excise duty. 6.Learned counsel for the appellants submitted that the respondents had rested content on the aspect of manufacture of the recovered caprolactam and had led no evidence on the aspect of its saleability. It was not enough that there should be manufacture and the manufactured product should find mention in the Excise tariff. It was necessary also to establish marketability and this not having been done, no Excise duty cou....