CX - Neither is there any evidence to prove that Sugar syrup is classifiable under 1702 9090 nor there is any evidence to prove that goods, in question, in form in which they come into existence in appellants factories, are marketable: CESTAT
By TIOL News Service
ALLAHABAD, SEPT 23, 2016: THE appellants are engaged in the manufacture of Biscuits.
It was noticed that the appellant was not showing the production of Sugar Syrup [CSH 1702 9090]and also not paying any CE duty when the same was captively consumedin the manufacture of exempted finished goods i.e. Biscuits of MRP below Rs.100/- per kg.
Resultantly, a SCN was issued inter alia requiring the appellant to pay CE duty of Rs.16.47 lakhs in respect of 612338.09 Kgs of Sugar Syrup consumed captively from December 2010 to September 2011.
The appellant submitted that it is a settled law as pronounced in Markfed Vanaspati & Allied Indus. - 2003-TIOL-87-SC-CX that onus of proving marketability of the products is on the revenue and merely because an item is appearing against a tariff entry it cannot be taken that there was manufacture of excisable goods unless its marketability is also established. It is further emphasized that the Department has not even tested the sugar syrup, captively manufactured, in the Chemical Laboratory so as to hold that it satisfied the technical characteristics of sugar syrup falling under Chapter heading 1702. Reference is also made to the Tribunal decision in Raptakos Brett & Co. Ltd. - 2006-TIOL-25-CESTAT-MUM where it is held that sugar syrup which comes into existence during the intermediate stage is not dutiable.
The lower authorities were not impressed with these submissions and confirmed the demand with equal amount of penalty and also interest.
The appellant is before the CESTAT and reiterates their submissions.
The CESTAT observed that the issue in appeal is squarely covered by the earlier order of Division Bench of the Tribunal, Final Order No.50759-50764/2015 dated 03.03.2015 wherein under similar circumstances the Tribunal had inter alia concluded -
"10. …neither there is any evidence to prove that the goods, in question, are classifiable under 17029090 nor there is any evidence to prove that the goods, in question, in form in which they come into existence in the appellants factories, are marketable. We, therefore, hold that the impugned order is not sustainable. The same is set aside. The appeals are allowed with consequential relief."
Accordingly, the appeal was allowed by setting aside the impugned order.
(See 2016-TIOL-2499-CESTAT-ALL)