TaxTMI 
TaxTMI 
2026 (9) TMI 84
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.... under Notification No.03/2006-CE dated 01.03.2006 and therefore, as per department, appellant was not entitled to duty free captive consumption of sugar syrup. The appellant should have paid the excise duty on "sugar syrup" coming into existence at intermediate stage. Accordingly, Revenue issued them a show cause notice dated 29.11.2011 proposing recovery of Central Excise duty of Rs. 49,68,469/- under Section 11A(4) along with interest under Section 11AB (now Section 11AA) of the Central Excise Act, 1944 and penalty under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the said Act. 1.2 The above show cause notice was decided by the Additional Commissioner vide order dated 28.02.2012 who confirmed the above demand of Central Excise duty under proviso to Section 11A(1) for the period prior to 07.04.2011 and under Section 11A(4) for the period thereafter, alongwith interest and also imposed a penalty of Rs. 49,68,469/- upon the appellant under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. Aggrieved with this order, appellant filed appeal before the Commissioner (Appeals) on the ground that sugar syrup manufa....
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....LT J-199 (SC) has held that for an article to be called 'goods', it should be known in the market as such and can ordinarily come to the market for being bought and sold. They manufacture sugar syrup as per their own specifications, which does not come to the market for being bought and sold and therefore, it does not fall within the definition of goods. The ratio of this decision has been followed in series of decisions. * Mere fact of having some shelf life to syrup by itself does not prove marketability as held by Hon'ble Apex Court in the case on FGP Ltd Vs. Union of India reported at 2004(168) ELT 289 (SC). * Hon'ble Delhi High Court in the case of Indofil Chemicals Vs. UOI reported at 1994 (73) ELT 9 (Del.) has held that in-process material of transient character having no independent identity and not proved by Department to be marketable, could not be treated as goods. * In following decisions, it has been held that sugar syrup coming into existence at intermediate stage, is not marketable:- a) CCE V/s. Raptakos Brett 2006 (194) ELT 101(T) b) Sakthi Soft Drinks - 2003 (154) ELT 247 (T) c) CCE V/s. Venkatesh Bevergaes - 20....
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....the department did not verify this information in time, it should not go against them. As there is no mens rea in the instant case, neither extended period is invokable nor are they liable to any penalty. They relied on the following decisions:- a) Rajasthan Spinning & Weaving Mills-2009 (238) ELT 3 (SC) b) Singhal Strips Ltd. - 2010 (256) ELT 15 (P&H) c) J. R. Fabrics 2009 (238) ELT 209 (P&H) d) Thirumala Alloys Castings - 2009 (238) ELT 226 (Mad) e) K. P. Pouches - 2008 (228) ELT 31 (Del) f) Hindustan Steel Ltd - 1978 (2) ELT J-159 3. During arguments, learned Advocate emphasized that the appellant manufactures sugar syrup in his factory as per the specifications provided by M/s Parle and consumes the same in manufacture of Parle brand biscuits. These goods being of a particular specification, are not marketable and hence, not excisable. The demand of differential excise duty as confirmed by the lower authorities is therefore, not sustainable. He placed reliance on the decision of CESTAT Mumbai in the case of Shiv Shakti Processed Foods Vs. Commissioner of Central Excise, Pune-I reported at 2023 (11) TMI 147 wherein it was ....
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....rchase the syrup as it would be impossible to sell the same. According to me the syrup is incapable of being sold in the market. This is to the best of our knowledge and information." In view of the above, Learned Advocate pleaded to allow their appeal and set aside the demand. 4. Countering the arguments, learned AR pleaded that percentage of sugar content in sugar syrup manufactured by the appellant is 80% as it contains 800gms of sugar in 1kg of sugar syrup. Explaining the manufacturing process, he mentioned that 800gms of sugar with 200ml of water and meager quantity of citric acid is mixed and then heated up to 118°C in a tank and then cooled to get the sugar syrup of the required specification/formula. The appellant uses this sugar syrup for manufacture of Parle brand biscuits. He mentioned that Hon'ble Tribunal in the case of Cadbury India Ltd reported at 1998 (104) ELT 457, has held that sugar syrup obtained by dissolving sugar crystal in water is a manufactured product and is separately classifiable under CTH 1702.30. When captively used in manufacturing of confectionery items, it is liable to duty. He also relied on the decision of CESTAT Bangalore in the case o....
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....R mentioned that availment of Cenvat credit is subject to following certain procedures including receipt of duty paid inputs in factory and availability of duty paying invoices. This being a factual issue, needs to be looked into by the lower authority. On limitations, he mentioned that the appellant had suppressed the fact of captive consumption of sugar syrup in the manufacture of exempted biscuits which fact came to light only when officers gathered intelligence. In view of this, he justified invocation of extended period in this case by the lower authorities for demanding duty for larger period and imposition of mandatory penalty under Section 11AC of the Central Excise Act, 1944. 5. We have heard the counter views. The main issue to be decided in this case is whether "sugar syrup" manufactured by the appellant in his factory and captively used in the manufacture of exempted Parle brand biscuits, is leviable to excise duty or not? 5.1 For levy of excise duty on an article, it should fall within the definition of Excisable goods as defined under Section 2(d) of the Central Excise Act, 1944, as per which, excisable goods means, goods specified in the fourth scheduled as bei....
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....d Biscuits manufactured for the Principals." It is therefore clear that the case of the appellant is different on facts as compared to relied upon cases. Therefore, cases relied upon by the appellant are clearly distinguishable. We rely on the decision of Hon'ble Supreme Court in the case of Collector of C. Ex., Calcutta Vs. Alnoori Tobacco Products reported at 2004 (170) ELT 135 (SC) wherein it has been held that an earlier decision should be adopted only when facts of both the cases are same. The relevant para 13 and 14 of the said decisions are as under:- "13. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 14. The following words of Lord Denning in the matter of applying precedents have become locus classicus : "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of o....
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....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 specified market, makes no difference so long as they are available for purchasers. [See A.P. State Electricity Board v. Collector of Central Excise, Hyderabad, (1994) 2 SCC 428 = 1994 (70) E.L.T. 3 (S.C.)]. 12. In Escorts Limited v. Commissioner of Central Excise, Faridabad, (2015) 9 SCC 109 = 2015 (319) E.L.T. 406 (S.C.), this Court has held that for excise duty to be chargeable under the constitutional entry read with Section 3 of the Central Excise Act, two pre-requisites are necessary. First, there must be "manufacture" which is understood to mean the bringing into existence of a new substance. And secondly, the word "goods" necessarily means that such manufacture must bring into existence a new substa....
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....t. If it is capable of being bought and sold, then the test of marketability is satisfied. In similar circumstances, this Tribunal in the case of Mysore Sugar Company Ltd. vs. Commissioner of Central Excise, Mangalore: 2008 (231) ELT 624 (Tri.-Bang.) considering the excisability of sugar syrup endorsed the view that if the sugar syrup having sugar content of more than 65% by weight, it is marketable, hence, excisable. "7. We have carefully considered the submissions and perused the records. As seen from the citations referred to by the learned Counsel, sugar syrup should have sugar content of more than 65% of weight for considering it as a dutiable as held in the case of Himalyan Vegi Fruits Ltd. v. CCE, Chandigarh (supra), CCE, Indore v. Venkatesh Beverages (supra) and Shivambu International v. CCE, Chandigarh (supra), in both these cases, the matter was remanded for de novo to ascertain the percentage of sugar concentration in the syrup. In the present case, the Revenue has not taken samples to find out the percentage of sugar syrup. It was an important characteristic for determining the solution as sugar syrup or not." 10. Similar view has also been expressed b....
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.... biscuits of the kind and brand that have been referred to, also does not appear to suffer from being rendered not marketable on account of it failing to meet the requirements of law regulating its use and exchange. The Ingredients of ParleG biscuits as listed by the manufacturer are Wheat Flour, Sugar, Partially Hydrogenated Edible Vegetable Oils, Invert Syrup (d Glucose, Laevulose), Leavening Agents [503 (ii), 500 (ii)), Salt, Milk Solids, Emulsifiers [322 or 471 & 481 (i)) and Dough Conditioners [223 land added Flavors (Artificial)." Thus, the original authority had sufficiently established the test of marketability. 12. In view of the above, we are of the view that the sugar syrup manufactured by the appellant, during the course of manufacture of exempted product namely, biscuits, is stable and marketable; hence, liable to duty being an excisable goods. However, we find that the issue relates to interpretation of law, therefore, invoking of extended period of limitation cannot be sustained and the demand be restricted to the normal period of limitation." 5.5 In this case, we find that the product "sugar syrup" manufactured by the appellant as per t....