S.S. Sekhon, Member (T)
1. The appellants are manufacturers of Absorbed Tetanus Toxoid (ATT) under chapter heading 30.03.20. During manufacture of ATT, a broth answering Muller & Miller Media emerges. Medium culture is used captively for propagation and development of Micro Organisms. Medium meets description under TH 38.21. This medium was found to be not accounted and cleared for captive consumption without payment of duty. Notification 175/86 meant for SSI (Production including culture media exceeds SSI limit). Notification 217/86 for captive consumption was not applicable as final product exempted.
2. We have heard both the sides and have considered the submissions. We find that:
(a) In para 9 & 10 of the Commissioner’s order impugned in this case, the Commissioner has given the following findings:
9. As could be seen from the preceeding paragraph the culture media manufactured by the assessees fall under chapter heading 38.21 of the Central Excise Tariff Act, 1985. In order to see whether the above media is liable for excise duty or not it is to be decided whether the said media has marketability. The assessees contended that it does not have marketability and as such cannot be called as ‘goods’ liable to Central Excise duty.
10. From the statements of Shri C. Suresh referred to earlier, it is seen that the culture media manufactured by them is stable for six months. As can be seen from the statement of Shri Uday Bhaskar, Analytical Chemist of the company, the culture media is kept in jars of 10 litres capacity sterilized and treated with 15 chemical ingredients subsequently. Thus the media does not emanate in a continuous process of manufacture. The fact that the goods are not in fact marketed is of no relevance and it is also not necessary that the goods in question should be generally available in the market in terms of the judgment in the case of APSEB v. Collector of Central Excise Hyderabad . In terms of the judgment in Indian Cable Co. Ltd. v. Collector of Central Excise, Calcutta the word marketability only means saleable or suitable for sale. It need not be in fact marketed. The article should be capable of being sold to consumers in the market as it is without anything more. In terms of Moti Laminates Pvt. Ltd. v. Collector of Central Excise, Ahmedabad the duty of excise being on production and manufacture which means bringing out a new commodity which is implicit that such goods must be usable saleable and marketable. In terms of Associated Cement Companies Limited v. Collector of Central Excise, Nagpur , also if the goods are capable of marketing then they will be covered by provisions of excise law. According to the technical write-up on the production of Tetanus Toxoid given by the assessees, the Muller & Miller medium is described in J. Bact (1954) Edition which gives the formula for the medium. Thus the culture media manufactured by the assessees is a product which is distinct from the ingredients used known as Muller and Miller medium through publication J. BCT. (1954) edition. It has got stabled shelf life and is used by the manufacturers of Tetanus Toxoid including the assessees. It is capable of being marketed and is saleable if the assessees desire to do so. It has got stable shelf life and is useable by the manufacturers of Tetanus Toxoid including the assessees. It is capable of being marketed and is saleable if the assessees desire to do so. Therefore, the mere fact that it is not marketed by the assessees will not make it non-marketable commodity. Moreover, similar culture media has been purchased by the assessees as admitted by them from other manufacturers and they had shown the photostat copies of invoices in respect of such purchases. Therefore, I am of the view that the culture media manufactured by the assessees are not only covered by chapter sub-heading 3821.00 of the Central Excise Tariff Act, 1985, but also are marketable. Therefore, they constitue ‘goods’ liable for excise duty”
(b) The above findings of the Commissioner did not establish in clear cut terms the marketability of the product in question. Marketability has been established on the basis of the statement of C. Suresh that the entity has shelf life and the findings arrived at that the appellants did not want to market the product and may not lose a monopoly and also the fact that similar culture media were being purchased by the appellants. The learned Counsel for the appellants have submitted across the bar that media purchased by the appellants was used only for sterilizing the entire process of manufacture and was not used for manufacture of ATT. Media which was purchased is admittedly similar and not same and therefore, we find that the marketability of Muller and Miller media cannot be established by establishing marketability of media which is different and which has different end-use. Marketability of Miller and Muller media is to be established, based on factual evidences available. The learned Counsel while opening his address in the matter has mentioned that the reliance on the statement of Suresh was not required since he was not technically qualified to comment on the shelf life of the entity. He submits that the father of Suresh was present in the court and was willing to depose. On a query from the Bench he conceded that deposition of the father was not before the Commissioner and the same could not be considered by the Commissioner. We, would therefore, in the interests of justice, consider this matter to be re-determined and for that purpose we would find that this is a fit case for being remanded for de novo adjudication.
(c) The learned DR has read the HSN notes for 38.21 and submits that in the present case Miller and Muller media known as Pepton Digested Broth emerging satisfies the notes as given in the HSN and therefore should be held to be excisable. He strongly objected to the statement being mentioned by the learned Counsel regarding use of the purchased media for sterilizing only, which is a new point according to him. The very fact that certain media they were not manufacturing but they would itself accept the marketability of the entity under dispute and the confusion made cannot be lightly brushed aside. We find that the Hon’ble Supreme Court in the case of Dharangadhara Chemicals Works Ltd. v. UOI as reported in 1997 (91) ELT (SC) has held that the product although covered by tariff item is not exigible to duty, unless marketable. Therefore, establishment of marketablity is sine quo non before it could be decided. Mere specification in the tariff would not call for visiting of the Central Excise levy. The Revenue has to establish marketability without any iota of doubt. Establishment of marketability based on similar product will not render Miller & Muller media to be excisable. What is required is article’s technical and commercial evidences to be brought on record.
(d) Appellants have contested the question of time bar and valuation. Since we are inclined to set aside the order and direct re-determination of the marketability based on technical and commercial evidence to be brought on record, we refrain from giving a finding on the issues and leave the matter open to be agitated before the lower authority.
3. In view of the above, the appeal is allowed as remanded for de novo adjudication.