Per V.K. Agrawal :

The issue involved in this appeal preferred by Revenue is whether the product 'D-2 Aminobutanol Tartrate' arising during the course of manufacture of 'Ethamkutol Hydrochloride' is an excisable goods leviable to duty.

2. The Collector, Central Excise, Baroda, in the impugned order dated 18.9.91, decided that the impugned product is not an excisable goods being unstable non-marketable, not known in the commercial world; that the department had not discharged the burden regarding the marketability of the product. He relied upon the judgments in the case of Bhor Industries Ltd. Vs. CCE, 1989 (40) ELT 280 (SC) and CCE Vs. Ambalal Sarabhai Enterprises, 1989 (43) ELT 214 (SC). However, Collector did not accept the contention of the assessee that their manufacturing operations were within the knowledge of the Department and that the assessee had suppressed the facts regarding independent existence of the impugned product.

3. Shri Sumit K. Das, learned D.R., submitted that as per the test report of the Chemical Examiner, the product is in the form of light green coloured powder; it is an organic chemical, D-2 Aminobutanol Tartrate is known to be a separate chemically defined organic compound. He further submitted that accordingly the product is classifiable under Chapter 29 of the Schedule to the Central Excise Act; that the impugned product is exempted from payment of Customs duty under Notification No. 14/88-Cus dated 1.3.88 (Sl.No. 40) as a raw material for the finished product Ethambutol Hydrochloride which indicate that the impugned product is a commercial product. He further mentioned that Chief Chemist has also opined that D-2 Aminobutanol Tartrate is a separate chemically defined compound and it is stable at normal temperature and pressure as it does not undergo any abrupt chemical change and has definite shelf life under normal conditions of temperature and pressure. The learned D.R. relied upon the judgment of the Supreme Court in the case of A.P. State Electricity Board Vs. CCE, 1994 (1) RLT 44 (SC) = 1994 (70) ELT 3 (SC) wherein the Apex Court held that "The `marketability' is thus essentially a question of fact to be decided in the facts of each case. There can be no generalisation. The fact that the goods are not in fact marketed is of no relevance. So long as the goods are marketable, they are goods for the purpose of Section 3. It is not also necessary that the goods in question should be generally available in the market." He also mentioned that the Respondents were recording the production of the impugned product in their log sheets; the product was stored till it was put to captive use; that Shri Satish Champaklal Manakiwala, Deputy Chief Executive in Research and Development Department of the Respondent, had deposed in his statement dated 10.9.87 that the figures of production and consumption of D-2 Aminobutanol Tartrate are maintained in log sheet at the plant by actual weighment; that the impugned product is kept in plastic container for the purpose of ascertaining its weight.

4. Ms. Enakshi Kulshrestha, learned advocate appearing for the Respondents M/s. Cadila Laboratories Pvt. Ltd., submitted that the impugned product, which comes into existence during the course of manufacture of their final product, cannot ordinarily come to the market for being bought and sold in such form; that the product is in such a crude and elementary form that it is not marketable and is not known to the commercial world as a separate distinctly identifiable commodity. Reliance was placed on the following decisions:-

(i) Bhor Industries Vs. CCE, 1989 (40) ELT 280 (SC),

(ii) Union Carbide India Ltd. Vs. UOI, 1986 (24) ELT 169 (SC)

(iii) CCE Vs. Ambalal Sarabhai Enterprises, 1989 (43) ELT 214 (SC)

5. The learned advocate, further, submitted that Department has not proved the marketability of the impugned product; that Collector had rightly concluded that there was no evidence to show that any investigation was made by th