{"id":68377,"date":"2008-03-05T00:00:00","date_gmt":"2008-03-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-central-excise-vs-ms-gurdaspur-distillery-on-5-march-2008"},"modified":"2017-03-26T14:35:14","modified_gmt":"2017-03-26T09:05:14","slug":"commissioner-of-central-excise-vs-ms-gurdaspur-distillery-on-5-march-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-central-excise-vs-ms-gurdaspur-distillery-on-5-march-2008","title":{"rendered":"Commissioner Of Central Excise, &#8230; vs M\/S. Gurdaspur Distillery on 5 March, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Commissioner Of Central Excise, &#8230; vs M\/S. Gurdaspur Distillery on 5 March, 2008<\/div>\n<div class=\"doc_bench\">Bench: Ashok Bhan, Dalveer Bhandari<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  4270 of 2002\n\nPETITIONER:\nCommissioner of Central Excise, Chandigarh\n\nRESPONDENT:\nM\/s. Gurdaspur Distillery\n\nDATE OF JUDGMENT: 05\/03\/2008\n\nBENCH:\nASHOK BHAN &amp; DALVEER BHANDARI\n\nJUDGMENT:\n<\/pre>\n<p>JUDGMENT<br \/>\nO R D E R<\/p>\n<p>CIVIL APPEAL NO.4270 OF 2002<\/p>\n<p>\tThe present appeal has been filed under Section 35L(b) of the Central Excise Act,<br \/>\n1944 (&#8216;the Act&#8217;) against the Final Order No.63\/2002-C dated 15th March 2002 in Appeal<br \/>\nNo.E\/2659\/2001-C passed by the Customs, Excise &amp; Gold (Control) Appellate Tribunal,<br \/>\nNew Delhi [for short &#8216;the Tribunal&#8217;].\n<\/p>\n<p>\tThe issue involved in the present appeal is whether Methane gas classifiable under<br \/>\nChapter Heading 2711.29 specified in the Schedule to the Central Excise Tariff Act, 1985<br \/>\nis liable to excise duty when consumed captively and not marketed.<br \/>\n\tBriefly stated, the facts of the case are that the respondent-assessee was engaged in the<br \/>\nmanufacture of de-natured Ethyl Alcohol and during the manufacture of de-natured Ethyl<br \/>\nAlcohol, a residue known as spent wash comes into existence and the same is reacted in a<br \/>\nclosed type digester and Methane gas is produced which, in turn, is used by the<br \/>\nrespondent as fuel in distillery.  A show cause notice dated<br \/>\nCIVIL APPEAL NO.4270 OF 2002<\/p>\n<p><span class=\"hidden_text\">\t\t\t\t-2-\t<\/span><br \/>\n28th April 2000 was issued by the Revenue, the appellant herein,  to show cause as to why<br \/>\nexcise duty of Rs.17,83,678\/- be not imposed on the Methane gas produced by the<br \/>\nrespondent and used captively during the period from 01.04.1995 to 31.07.1997 by<br \/>\ninvoking extended period under the proviso to Section 11A(I) of the Act.<br \/>\n\tAssessee, in response to the said notice, took a stand that Methane gas produced by it<br \/>\nis not marketable and, therefore, no excise duty could be levied on the same.<br \/>\n\tThe Adjudicating Authority, vide order dated 03rd April 2001, confirmed the demand.<br \/>\nA penalty of Rs.4,50,000\/- (Four Lac Fifty Thousand) under Rule 173Q of Central Excise<br \/>\nRules, 1944 and Rs.17,83,678\/- (Seventeen Lac Eighty Three Thousand Six Hundred<br \/>\nSeventy Eight) under Section 11AC of the Act was also imposed.<br \/>\n\tAssessee, being aggrieved, filed an appeal before the Commissioner (Appeals).  The<br \/>\nappellate authority accepted the appeal and came to the conclusion that the gas in<br \/>\nquestion is not marketable.  This finding was arrived at on the basis that the burden to<br \/>\nprove that the gas in question is marketable was on the Department and the Department<br \/>\nfailed to discharge the same.  However, no finding was recorded regarding invocation of<br \/>\nCIVIL APPEAL NO.4270 OF 2002<br \/>\n<span class=\"hidden_text\">\t\t\t\t-3-<\/span><br \/>\nextended period.\n<\/p>\n<p>\tRevenue, being dissatisfied, filed an appeal before the Tribunal which was dismissed<br \/>\nby the impugned order.  The Tribunal dismissed the appeal in view of the finding<br \/>\nrecorded by the Commissioner (Appeals) that the goods in question are not marketable<br \/>\nand the Revenue had failed to produce any evidence in respect of marketability of the<br \/>\ngoods in question.  Hence, the Tribunal confirmed the order of the Commissioner<br \/>\n(Appeals).  The Tribunal also relied upon a judgment of this Court in the case of <a href=\"\/doc\/1092678\/\">Bhor<br \/>\nIndustries Ltd. v. Collector of Central Excise<\/a> reported in 1989(40) ELT 280 wherein it<br \/>\nwas held that marketability is an essential ingredient in order to attract excise duty on the<br \/>\nexcisable goods under the schedule to the Central Excise Tariff Act.<br \/>\n\tIn our opinion, an article does not become liable to excise duty merely because of its<br \/>\nspecification in the schedule to the Central Excise Tariff Act unless it is salable and<br \/>\nknown to the market.  Counsel for the Revenue has very fairly stated that the Revenue<br \/>\nhad not led any evidence to show that the goods in question were marketable.<br \/>\n\tThe finding recorded by the Commissioner (Appeals) that the Methane gas produced<br \/>\nby the respondent was not marketable <\/p>\n<p>CIVIL APPEAL NO.4270 OF 2002<br \/>\n<span class=\"hidden_text\">\t\t\t-4-<\/span><br \/>\nand as confirmed by the Tribunal is a finding of fact which does not call for any<br \/>\ninterference.  Since the Revenue had not been able to lead any evidence to show that the<br \/>\ngoods in question are marketable, in the absence of the same, it cannot be held that<br \/>\nMethane gas was marketable and consequently the excise duty was exigible.<br \/>\n\tThe appeal is, therefore, dismissed.  No costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Commissioner Of Central Excise, &#8230; vs M\/S. Gurdaspur Distillery on 5 March, 2008 Bench: Ashok Bhan, Dalveer Bhandari CASE NO.: Appeal (civil) 4270 of 2002 PETITIONER: Commissioner of Central Excise, Chandigarh RESPONDENT: M\/s. Gurdaspur Distillery DATE OF JUDGMENT: 05\/03\/2008 BENCH: ASHOK BHAN &amp; DALVEER BHANDARI JUDGMENT: JUDGMENT O R D E [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-68377","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Commissioner Of Central Excise, ... vs M\/S. 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