Brief of the case:
The Hon’ble Supreme Court in the case of M/s Escorts Ltd. held that the test of marketability fairly satisfies when it is shown that the product is commercially known and being capable of bought and sold. The same not being actually sold is totally irrelevant. Thus, the Transmission Assembly an intermediate product being capable of sold, though not sold by the assessee is chargeable to excise duty as the same is commercially known.
Facts of the case:
- The assessee company is engaged in manufacture of tractors an intermediate product ‘Transmission Assembly’ which comes into existence during the manufacture of tractors.
- The tractors during the period of dispute was exempted from the payment of excise duty, thus, department sought to levy excise duty on the intermediate product viz Transmission Assemblies by arguing that Transmission Assemblies of tractors was a commercially known product therefore, fall into the category of excisable goods and liable to duty as the final product is exempt.
- The tribunal ruled the issue in the favour of department by holding that The mere fact that the transmission assembly is meant only for the tractors manufactured by them will not mean that the impugned product is not capable of being brought to the market for being bought and sold because otherwise also its marketability get prove by the fact that the same being imported by the Farmtrac Division of the assessee company.
- The assessee is in appeal against the order of tribunal before Hon’ble Supreme Court.
Contention of Assessee:
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