Custom, Excise & Service Tax Tribunal
M.B. Bakers Pvt. Ltd vs C.C.E, Indore on 18 October, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing: 7.10.2016 Date of pronouncement : 18.10. 2016 Central Excise Appeal No.1884, 1885, 1886 of 2012 Arising out of the order-in-appeal No.IND/CEX/000/APP/108 to 110/2012 dated 12.4.2012 passed by the Commissioner (Appeals.), Central Excise, Indore. M.B. Bakers Pvt. Ltd. Appellants Pradeep Badlani, Director Jagdish Badlani Vs. C.C.E, Indore .. Respondent
Appearance:
Present Ms. Padmavati, Patil, Advocate for the appellants Present Shri R.K. Manjhi, A.R. for the respondent Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran, , Technical Member Final Order No. 54111 54113/2016 B. Ravichandran:
These three appeals are involving same issue of duty liability of the appellants for sugar syrup prepared within the factory in further manufacturing of biscuits for their principal (Parle Products Pvt. Ltd.).
2. The appellants are engaged in the manufacture of biscuits on behalf of M/s Parle Products Pvt. Ltd. on job work basis . During the course of manufacture of biscuits, sugar syrup is prepared and used captively by the appellants. With effect from 1.3.2007, biscuits were exempted by the Notification No.3/2006-CE dated 1.3.2006. Revenue entertained a view that since final products ( biscuits) are exempted , the intermediate product , sugar syrup arising in the appellants unit is liable to central excise duty as the exemption under Notification No.67/1995-CE dated 16.3.95 will not be available to them. Accordingly, proceedings were initiated to recover the central excise duty. The original authority confirmed the confirmed and on appeal , the first appellate authority confirmed the original order.
3. Ld. Counsel for the appellants submitted that sugar syrup prepared by the appellant is not at all a marketable product. They do not have shelf life and they are never sold ordinarily in the market in the form in which it is prepared by the appellant. Reliance placed on the single invoice of other manufacturer is completely misplaced and not relevant to their case. They have relied on the decision of the Tribunal in respect of similarly placed job work of M/s Parle . They have also relied on various decided cases regarding non-leviability of central excise duty on sugar syrup captively used in the manufacture of biscuits. It was also submitted that fructose contents is less than 50% as certified by the reputed laboratory.
4. Ld. A.R. for Revenue reiterated the findings of the lower authorities.
5. We have heard both sides and perused the appeal records. We find that duty liability of sugar syrup prepared during the course of manufacture of biscuits has come up for decision by the Tribunal in many cases. In a similar set off facts involving another job worker of M/s Parle, the Tribunal in Rishi Bakers Pvt. Ltd. vs. C.C.E. & S.T., Kanpur 2015 (328) ELT 634 (Tri-Del.) held as below:
9.?Even if it is assumed that the goods, in question, are covered by sub-heading 1702 90 90, for attracting Central Excise duty the goods must be proved to be marketable. The Tribunal had remanded this matter to Commissioner (Appeals) for examining the question of marketability of the goods, in question. In this regard it is settled law that the marketability of a product has to be established in the condition in which it emerges. In this regard the Apex Court in the case of Bata India Ltd. v. CCE, New Delhi (supra) has held that the test of marketability is whether product is marketable in condition in which it emerges. In this regard the marketability of the goods produced by a particular manufacturer cannot be presumed on the basis of the marketability of the similar goods in different condition being produced by another manufacturer, unless it shown that the two products are identical. In these cases, the Commissioner (Appeals) has held that the goods, in question, to be marketable only on the basis that the invert sugar syrup being manufactured by M/s. Dhampur Speciality Sugars Ltd. is being sold to M/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 + 66.50) and the same is a mixture of glucose (with specific rotation of +52.70) and fructose (with specific rotation of - 920), with net specific rotation of - 19.70. The process of hydrolysis of cane sugar (which is dextrorotatory i.e. with rotation of + 66.50) is also called inversion, as the mixture of glucose and fructose formed by this process is levorotatory with sp. Rotation of - 19.70 and for this reason the mixture of glucose and fructose formed by hydrolysis of cane sugar is called invert sugar. The invert sugar has longer shelf life. Whether a sugar syrup is ordinary cane sugar syrup or is invert sugar syrup has to be ascertained by chemical test which has not been done. It is, therefore, totally wrong to presume a given sugar syrup as invert sugar syrup without test. The judgments of the Apex Court in the cases of Gujarat Narmada Valley Fert. Co. Ltd. v. CCE & Cus. (supra), Nicholaas Piramal India Ltd. v. CCE, Mumbai (supra) and Medley Pharmaceuticals Ltd. v. CCE & Cus, Daman (supra) cited by the learned DR are not applicable to the facts of this case.
10.?In view of the above discussion, we hold that neither there is any evidence to prove that the goods, in question, are classifiable under 1702 90 90 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. Similar view was taken in C.C.E.., Jaipur I vs. Kanti Beverages Pvt. Ltd. and Shri Dinesh Chadnra Sharma 2016 TIOL 2035 CESTA T DEL. and Bagwati Foods Pvt. Ltd. and Sudhir Kumar Gupta, Authorised Sigantory vs. C.C.E. & S.T., Kanpur - 2016 TIOL 2499 CESTA T ALL.
6. We also note that in the present case, no efforts have been made by the Department to test the product for the correct composition and nature. Instead, the percentage of sugar in syrup was arrived at by the calculation of quantity used. Further, the whole allegation of marketability is based on one invoice of another manufacturer for the product sugar invert syrup. We find that the marketability of the product now in question cannot be established derivatively without ascertaining the actual nature of the impugned product and also its marketability in reality.
7. In view of the above discussions and findings, we find that impugned orders are not sustainable. Accordingly, the same are set aside and the appeals are allowed.
(Pronounced in the open Court on 18.10. 2016) (Justice Dr. Satish Chandra) President (B. Ravichandran) Technical Member scd/ Appeal No.E/1884-1886/2012 1