Customs, Excise and Gold Tribunal - Delhi
S.K. Industries Pvt. Ltd. vs Commissioner Of Central Excise on 28 March, 2006
ORDER T.V. Sairam, Member (T)
1. The appellants, M/s. S.K. Industries Pvt. Ltd., have filed this appeal challenging the order of the Commissioner (Appeals) dated 20.1.2004. In the impugned order, the Commissioner (Appeals) had held that, the product in dispute is nothing but packing materials for jelly based products manufactured by the appellants. He has also observed that similar other packing material like plastic cups used by the appellants for packing their jelly product are being purchased by them from the market. He has also noticed that the product in question does not emerge in the integrated process of manufacture of jelly based products.
2. We have seen the sample of the product in question. The sample shown to us is like a toy which can contain the jelly based product. In the appeal itself the appellants have called such products as "containers" which is not disputed, as these are the containers in various forms resembling toys. The jelly based products when packed in a container like toy would attract the buyers who are children. In our view, the product in question is nothing but a container in various attractive forms resembling toys so that jelly based products could be effectively marketed to their clients, more particularly, children.
3. The learned counsel, however, relies upon the following judgments to support that the product in question Is not a standard item nor the goods generally marketed, and hence not liable to duty:
(a) Union of India v. Sonic Electrochem (P) Ltd. :
It is difficult to lay down a precise test to determine marketability of articles. Marketability of goods has certain attributes. The essence of marketability is neither in the form nor in the shape or condition in which the manufactured articles are to be found, it is the commercial identity of the articles known to the market for being bought and sold. The fact that the product in question is generally not being bought and sold or has no demand in the market would be irrelevant....If one goes to the market to purchase plastic body of EMR of the respondents either for replacement or otherwise one cannot get it in the market because at present it is not a commercially known product for these reasons, the plastic body, which is a part of the EMR of the respondents, is not 'goods' so as to be liable to duty as parts of EMR under para 5(d) of the said exemption notification.
(b) Gujarat Narmada Valley Fert. Co. Ltd. v. CCE & Cus. 2005 (184) E.L.T. 128 (S.C.):
Actual sale in the market is not necessary but the articles must be capable of being sold in the market or known in the market as goods.
4. The learned JDR relies upon the decision of the Apex Court in the case of A.P. State Electricity Board v. Collector of Central Excise Hyderabad . , wherein it was held that:
The "marketability" is thus essentially a question of fact to be decided in the facts of each case. There can be no generalization. The fact that the goods are not in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purposes of Section 3. It is not also necessary that the 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, it makes no difference so long as they are available for purchasers.
5. After hearing both sides, we observe that the product in dispute is nothing but a plastic container in fanciful shape resembling a bear, mobile phone etc. which is used for filling the jelly based product sweet-meat meant for children. Although the learned Counsel has tried to distinguish the product from the ordinary plastic containers, pleading that they are not marketable as they are not generally brought to the market and sold in such shapes, it is an admitted fact that the product in question is nothing but forms of containers which are capable of being bought and sold. In this connection, we also find that the Apex Court while dealing with the marketability of the goods in the case of Union of India v. Sonic Electrochem (P) Ltd., supra, has emphasized that to establish marketability, precise test to determine marketability is not possible. Essence of marketability is neither in the form nor in shape or condition of the article, but the commercial identity of the article known to the market. There is no doubt that, the product in question is a variety of container and as containers are commercially known to the market and also as the appellants themselves have been purchasing such containers though in the shape of cups from outside, goes to suggest that the fancy container of jelly based product is nothing but a substitute of container which can be called yet another variety of container. Having regard to the facts and circumstances of the case, and after going through the record and examining the sample product in question, and hearing both sides at length, we do not find any reason to interfere with the impugned order and hence the appeal is dismissed.
(Dictated and pronounced in the open Court)