1. Appellant argued goods not excisable due to captive use and lack of marketability; revenue supported impugned order confirming duty. (Para 4 , 5 )
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2026 Supreme(Online)(CESTAT) 3372
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Ajay Sharma, J, M.M. Parthiban, Technical Member
Senior Manager (P & S) Western Railway Printing Press – Appellant
Versus
Commissioner of Central Goods & Services Tax Mumbai Central CGST Commissionerate – Respondent
Excise Appeal No. 87656 of 2016
Advocates:
For the Appellants/Petitioners: Delilah Fernandes
For the Respondents: Xavier Mascarenhas
For the Appellants/Petitioners: Delilah Fernandes
For the Respondents: Xavier Mascarenhas
Excise duty is applicable only to 'marketable goods' capable of being bought and sold for consideration. The burden of proving marketability rests on the Revenue; failure to do so, especially for captive-use items, renders the demand for excise duty unsustainable.
Headnote:(A) Central Excise Act, 1944 - Section 11A - Central Excise Rules, 2002 - Rule 25 - Marketability of goods - Articles of stationery (registers, account books, forms) used exclusively by Western Railways - Goods classifiable under CETH 4820.10 - Contention that items are non-marketable as they are for captive use and cannot be bought/sold in the open market - Burden of proving marketability lies with the Revenue - If Revenue fails to produce evidence of marketability, the claim that goods are non-marketable must be accepted (Paras 8.1, 8.2).
(B) Classification - Chapter 48 vs Chapter 49 - Products formulated for internal railway functions with specific details and blanks are considered "products of printing industry" - Such items are correctly classifiable under Chapter 49 and thus excluded from the duty applicable to Chapter 48 (Paras 8.2).
Facts of the case:
The appellant, Western Railway Printing Press, manufactures various stationery items including reservation slips, receipt books, and working timetables for the exclusive use of Western Railways. The Department issued a Show Cause Notice demanding central excise duty of Rs. 95,93,181/- under CETH 4820.10, arguing that the goods are excisable. The appellant contended that since the goods are produced for internal captive consumption and possess no potential for sale in the market, they are non-marketable and not subject to excise duty.
Findings of Court:
The products in question, containing specific details of the railway's day-to-day functions, are not capable of being bought and sold for consideration and are therefore not marketable. Furthermore, the items are "products of the printing industry" and should be classified under Chapter 49, rendering the demand for duty under CETH 4820.10 unsustainable.
Issues: Whether the stationery items manufactured for internal railway use are "marketable goods" liable for Central Excise duty and whether they are correctly classified under Chapter 48 or Chapter 49.
Ratio Decidendi: The court held that marketability is an essential ingredient for a product to be excisable. Since the Revenue failed to discharge the burden of proof that the captive-use railway forms were marketable, and since they are essentially products of the printing industry (Chapter 49), they are not dutiable.
Result: Appeal allowed.
Legal Category Hierarchy
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taxation
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central excise
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excisable goods
- marketability
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classification of goods
- printed stationery
- captive consumption
- burden of proof
- valuation
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excisable goods
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central excise
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practice and procedure
-
appeal
- jurisdiction (Para 2)
-
appeal
Table of Contents
2. Tribunal held product classifiable under Chapter 49 as product of printing industry; revenue failed to prove marketability. (Para 9 )
3. Goods not excisable if revenue fails to prove marketability and product correctly classifiable under Chapter 49. (Para 9 )
4. Impugned order set aside; appeal allowed with consequential relief. (Para 10 )
Per: M.M. PARTHIBAN
This appeal has been filed by the Senior Manager (Printing & Stationery), Western Railway Printing Press, Mahalaxmi, Mumbai (hereinafter referred to as “the appellant”, for short) assailing the Order-in-Original No. 01/SK/M-1/2014 dated 21.05.2014 (hereinafter referred to as “the impugned order”) passed by the Commissioner, Central Excise, Mumbai-I.
2. Central Board of Indirect Taxes & Customs (CBIC), Ministry of Finance have issued Notification No. 02/2017-Central Tax dated 19.06.2017, as amended, for prescribing territorial jurisdiction of Principal Commissioners/Commissioners of Central Goods and Service Tax & Central Excise for various Commissionerates across the country in exercise of the powers vested on them read with it under Sections 3 and 5 of the Central Goods and Services Tax Act, 2017 read with Section 139 ibid. As per the said notification dated 19.06.2017, each of the Commissionerate is provided with specific jurisdiction, which inter alia contain particular Postal Index (PIN) code numbers for the areas covered and taxpayers falling under such area, who are covered under the existing laws of Central Excise Act, 1944; Finance Act, 1994. Therefore, considering the aforesaid legal provision and that the appellant is presently functioning under the jurisdiction of the Central Goods and Service Tax authorities, the revised name and address of the respondent department has been suitably incorporated. The Registry is also directed to incorporate the following changed name and address of the respondent department in the appeal records for the purpose of disposal of the appeal, as “Commissioner of Central Goods and Services Tax, Mumbai Central Commissionerate, GST Bhavan, 115 Maharshi Karve Road, Opp. Church Gate Station, Mumbai – 400 020.”
3.1 Brief facts of the case, leading to this appeal, are summarized herein below:
3.2 The appellant herein is engaged inter alia, in manufacture and printing of various stationery items viz., registers, account books, receipt books, forms, order books, letter pads, memorandum pads and similar articles, binders, file covers, manifold business forms and other articles of stationery of papers and paper boards exclusively used for by the Western Railways. The reservation slips are used for booking of tickets in railways; receipt books used by Travelling Ticket Examiner (TTE) for collecting excess fares, fines, penalty etc.; Working timetable used by motorman for running the trains. Such stationery items are having characters and letters printed, inscription of logo of Western Railways, meant for the exclusive use and utility within the departments/divisions/sections of the Western Railway alone, which is one of the zonal railways of Indian Railway, working under the Ministry of Railways, Government of India. These printing and stationery items classifiable under Central Excise Tariff Sub-heading 4820.10 are not capable of being brought to the market for sale or distribution and therefore have no potentiality of sale or marketable nature. However, the department had contended that since the impugned goods are classifiable under Central Excise Tariff Heading (CETH) 4820.10 of the Schedule to the Ce/ntral Excise Tariff, and such goods are liable for payment of central excise duty at 12% along with education cess and higher education cess. On this basis, the Department had issued Show Cause cum Demand Notice (SCN) dated 19.03.2014 demanding central excise duty of Rs. 95,93,181/- along with interest under Section 11A of the Central Excise Act, 1944. The said SCN was adjudicated by the learned Commissioner of Central Excise in confirming the proposal for demand of central excise duty of Rs. 95,93,181/- along with interest under Section 11A ibid and also imposed penalty equal to duty under Rule 25 of the Central Excise Rules, 2002. Feeling aggrieved with the impugned order, the appellant has preferred this appeal before the Tribunal.
4. Learned Counsel appearing for the appel
