IMPORTANT POINT
In an excisable product, intermediate goods so coming into existence may be specified in the Schedule as excisable, they would not be subjected to duty unless they satisfy the test of marketability.

JUDGMENT

Shah, J.-The Commissioner of Central Excise, Chandigarh has challenged the order dated 8th May, 2000 passed by the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (for short referred to as "CEGAT") in Appeal No. E/3084/99-D etc., by which the Tribunal dismissed the appeals preferred by the revenue involving the common question-whether the respondents were engaged in the manufacturing propagation of yeast leviable to central excise duty. Hence, these appeals.

2. Therefore, the short question involved in these appeals is-whether the yeast propagated by the respondents having self-life of 6-8 hours which can be preserved in containers was excisable to the customs duty under description of heading 21.02 of the Central Excise Tariff Act. The Tariff Heading 21.02 reads thus:-

Heading Sub- Description of Goods Rate No. Heading No.   Duty

21.02 Yeasts (active or inactive); other single-cell micro- organisms, dead (but not including vaccines of Chapter 30); prepared baking powders.

2102.10 -Put up in unit containers  10% and ordinarily intended for sale

2102.90 Other 10%

3. Learned counsel for the appellant submitted that the order passed by the CEGAT is on the face of it illegal in view of the aforesaid specific Item No. 21.02 which makes yeast as excisable. He submits that the CEGAT has arrived at the conclusion that its life is for 6-8 hours and there is no reason to hold that it is not marketed or marketable.

4. As against this, learned counsel appearing on behalf of the respondents submitted that the contention raised by the counsel for the appellant is totally beside the point as it was never contended by the respondents before the CEGAT that yeast is not excisable. What was contended before the CEGAT was that respondents were not manufacturing yeast. On the contrary, they were purchasing yeast from the market and propagating the same for manufacture of potable liquor.

5. In our view, it would be misreading the order passed by the CEGAT to hold that it has arrived at the conclusion that yeast is not excisable. The CEGAT has held that the process adopted by the respondents of purchasing the yeast from the market which is excisable and mixing it with molasses and water for propagating the same cannot be held to be manufacture of yeast, as such liquid in mixture form is not marketable. In the present case, in the show cause notice issued by the Assistant Commissioner the process adopted by the respondents is mentioned which makes the position clear. It is stated in the show cause notice that party is engaged in manufacture/propagation of yeast for captive consumption in manufacture of potable Ethyl Alcohol. For that purpose, two processes are adopted by the party. Firstly, respondents purchase fresh yeast of 500 grams packets from the agents of yeast manufacturing Company. They mix 10 kilograms of fresh yeast with molasses purchased from the market which is diluted in water in a tank capacity of 10,000 litres, where it is propagated for 13 hours. The said mixture is called BUB as defined in the Punjab Distillery Rules, 1932. The said BUB is shifted to fermentation vessel. After fermentation, it is called WASH as defined in the Distillery Rules. Similarly, the party also purchases yeast culture procured from the National Chemical Laboratory, Pune. First molasses are taken in a small flask of 50 ml. and a pinch of yeast from slant or brought out yeast is added with the help of Platinum wire. The mixture so obtained is kept in