No Excise Duty Leviable on ‘Sugar Syrup’ which is not an Intermediate Product used for Manufacture of biscuits: CESTAT [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the excise duty cannot be levied on the sugar syrup which was not an intermediate product used for the manufacture of biscuits. 

Shiv Shakti Processed Foods, the appellant assessee was engaged in the manufacture of biscuits and import of the sugar syrup used for the manufacturing of the biscuits. The assessee appealed against the order passed by the Commissioner of Central Excise (Appeals) for confirmation of the demand of Rs 13,61,293/- under section 11A of the Central Excise Act, 1944, along with applicable interest under section 11AB of the Central Excise Act. 

Viraj Reshamwala and Siddhanth Sriram, the counsels for the assessee contended that the sugar syrup was not an intermediate product since it fails the test of ‘marketability’ owing to being an unstable compound made by heating of sugar, water, and citric acid and, therefore, not liable to duties of central excise. 

Xavier R Mascarenhas, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand raised by the revenue was as per the law and liable to be sustained. 

The Bench observed that in the case of Venugopal Foods Pvt Ltd, the court held that in the absence of any test report to contradict the ‘fructose’ content in the ‘sugar syrup’ produced by the assessee and did not find sufficient reasons to consider the impugned goods to be excisable within the meaning of the section 2(d) of the Central Excise Act. 

The two-member bench comprising Ajay Sharma (Judicial) and C J Mathew (Technical) quashed the excise duty demand imposed on the sugar syrup produced by the assessee while allowing the appeal filed by the assessee. 

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates