2025-VIL-2128-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Manufacture of tailor-made goods, Marketability of goods - Revenue alleged that the respondent has manufactured and clandestinely removed the finished goods from the factory of production without payment of central excise duty - Whether the goods manufactured by the respondent are 'marketable' and hence, excisable under the Central Excise Act, 1944 - HELD - The goods manufactured by the respondent are not marketable, as they were tailor-made as per the specific requirement of the customers and were not capable of being bought and sold in the market. The unassembled parts were tailor made goods, removed in CKD condition and they are not goods capable of being bought and sold - For an article to be subject to excise duty, it must be capable of being marketed and known in the market as a distinct identifiable commodity. In the present case, no evidence brought on record by the Revenue to show that the goods manufactured by the respondent were capable of being marketed or bought and sold in the market. Therefore, the goods manufactured by the respondent do not satisfy the test of 'marketability' and hence, are not excisable - the order of the Commissioner (Appeals) which had dropped the demand of duty, along with interest and penalty, is upheld – The Revenue appeal is dismissed - Whether the respondent wrongfully availed Cenvat credit based on the fake invoices - HELD - The Department has not brought any evidence to establish that the respondent had availed Cenvat credit based on fake invoices. The Adjudicating Authority has stated that the respondent had not produced any concrete evidence to prove that the inputs were actually received in their factory and accounted for in their records. However, the Department had also failed to prove beyond doubt that the subject goods were not received by the respondent and that it was only a paper transaction. Therefore, the Department has not been able to prove the allegation of wrongful Cenvat credit availed by the respondent.
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