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Rishi Bakers Pvt. Ltd. v. Commissioner of C. Ex. & S.T., Kanpur

CESTAT

Mar 3, 2015

Judgment

Subsequent
References

CaseIQ

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Summary of Tribunal Order (Dictated and pronounced in open Court)

Factual and Procedural Background

The appeals arise from departmental show cause notices and subsequent confirmed demands of Central Excise duty, interest and penalties concerning sugar syrup cleared for captive use by three manufacturers of biscuits: M/s. Rishi Bakers Pvt. Ltd., M/s. Ramakrishna Bakers Pvt. Ltd., and M/s. Swati Biscuit Manufacturing Co. The persons named in the proceedings include directors/partners of these entities.

The dispute periods vary by appellant (Rishi: Jan 2009–Jun 2009; Ramakrishna: Feb 2010–Jun 2010; Swati: Jan 2002–Jun 2009). During parts of the periods, biscuits with a per kg retail price equivalent not exceeding Rs. 100 were fully exempt under a notification (Notification No. 67/95-C.E.). The appellants manufactured a sugar syrup by dissolving cane sugar in water at 108°C with a small quantity of citric acid and used it in biscuit manufacture.

The Department alleged that the sugar syrup is classifiable under sub-heading 1702 90 90 (sugar syrup blends containing in dry stage 50% by weight of fructose), is marketable, and hence excisable. Assistant Commissioner confirmed duty demands, interest and penalties (including penalties under Rule 26 of the Central Excise Rules, 2002 on directors/partners). Commissioner (Appeals) dismissed the first appeals. The Tribunal remanded for de novo adjudication to examine marketability of the sugar syrup specifically (not the final product). On de novo adjudication the original authority again confirmed demands; Commissioner (Appeals) dismissed appeals by common order dated 30-08-2012. Appeals were filed to the Tribunal; stay orders required deposits and stayed recovery on compliance. The Tribunal extended stay, the Department appealed to the Allahabad High Court, which directed the Tribunal to decide within six months. The Tribunal heard the appeals and delivered the present order.

Legal Issues Presented

Whether the sugar syrup manufactured by appellants for captive use is classifiable under sub-heading 1702 90 90 of the Central Excise Tariff (i.e., whether it is a "sugar syrup blend" containing in dry stage 50% by weight of fructose)?
Whether the sugar syrup, in the condition in which it emerges from the appellants' factories, is marketable such that it is liable to Central Excise duty?
Whether the appellants are entitled to exemption under Notification No. 67/95-C.E. (as interpreted with the proviso) for intermediate products used for captive consumption, in light of the requirements of Rule 6 of the Cenvat Credit Rules, 2001?
Whether penalties imposed on the appellant companies and their directors/partners were legally warranted in the circumstances (including the claim that earlier duty was paid until June 2008 and later cessation was communicated to the Department)?

Arguments of the Parties

Appellants' Arguments (as summarized from the opinion)

The appellants disputed classification under sub-heading 1702 90 90, relying on a test report from Shriram Institute of Industrial Research showing fructose content less than 50%.
The Commissioner (Appeals) failed to address the fructose-content plea and the Department never had the appellants' samples tested to establish 50% fructose by weight.
Marketability of the appellants' sugar syrup cannot be presumed from the marketability of invert sugar syrup sold by other manufacturers; the Tribunal had remanded to determine marketability of the appellants' specific product.
If the sugar syrup is not marketable, it cannot be excisable even if classifiable.
The sugar syrup is (or should be) exempt under Notification No. 67/95-C.E., applying the proviso that exempts intermediate products used for captive consumption where the manufacturer has discharged obligations under Rule 6 of the Cenvat Credit Rules; the appellants contend they did not take Cenvat credit on inputs used for exempted biscuits.
Because the dispute involved interpretation, penalties were not called for; appellants had earlier paid duty on captive clearances until June 2008 and then stopped after intimating the Department.

Revenue's Arguments (as summarized from the opinion)

The Department asserted that the appellants did not dispute classification of the sugar syrup as invert sugar syrup classifiable under 1702 90 90.
The Department relied on evidence of sales of "invert sugar syrup" by M/s. Dhampur Speciality Sugars Ltd. to large food manufacturers (Britannia, J.B. Mangaram, ITC) to demonstrate the product is marketable.
The Department relied on authority (Nicholas Piramal, Gujarat Narmada, Bhor Industries, Medley Pharmaceuticals) to support that shelf-life or absence of actual sale is not determinative of marketability where product is capable of being sold or known in the market.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Nicholas Piramal India Ltd. v. CCE, Mumbai	Held that shelf-life is not a relevant factor to test marketability unless it is shown that product has absolutely no shelf-life or shelf-life is such that it is not capable of being bought or sold during that shelf-life.	The Department relied on this case to argue marketability; the Tribunal observed that this principle was not applicable to the facts because marketability of the appellants' product was not established and could not be presumed from other manufacturers' products.
Gujarat Narmada Valley Fert. Co. Ltd. v. CCE & Cus	Held that actual sale is not necessary but articles must be capable of being sold in market or known in market as goods.	The Department cited this authority to support marketability; the Tribunal found it inapplicable because the marketability of the appellants' specific sugar syrup was not shown and could not be presumed from dissimilar products.
Bhor Industries Ltd. v. CCE	Earlier authority relied upon in the context of marketability (as noted in other Apex Court decisions cited by Revenue).	Mentioned as part of the chain of authorities relied on by Revenue; the Tribunal did not find these authorities determinative on the present facts.
Medley Pharmaceuticals Ltd. v. CCE & Cus, Daman	Earlier authority on marketability concepts (cited by Apex Court in other contexts).	Mentioned by Revenue; the Tribunal held these were not applicable to the facts where no chemical testing or other evidence established the appellants' syrup as the same product.
Bata India Ltd. v. CCE, New Delhi	Established that the test of marketability is whether the product is marketable in the condition in which it emerges from the manufacturer.	The Tribunal applied this principle directly: marketability must be shown for the appellants' product in the condition it emerges; it cannot be presumed from a different manufacturer's product unless identity is shown.
Metlex (I) Pvt. Ltd. v. CCE, New Delhi	Filing of a classification list mistakenly does not mean that a party has to pay duty if in law he is not bound to pay duty.	The Tribunal relied on this principle to reject the inference that earlier voluntary payment of duty till June 2008 amounted to acceptance that the goods conformed to sub-heading 1702 90 90.
Bonanzo Engg. & Chemical P. Ltd. v. CCE	Aligned with the view that mistaken filing/entry does not necessarily bind a party to pay duty where legal liability is absent.	The Tribunal cited this together with Metlex to support the proposition that prior classification/payment does not prove the composition required for sub-heading 1702 90 90.
Sakthi Sugars Ltd. v. CCE (Tri.-Chennai)	Tribunal judgment cited by appellants regarding applicability of exemption in certain facts (as relied upon before the court).	The Tribunal considered this judgment but concluded that its ratio was not applicable to the facts of the present cases.

Court's Reasoning and Analysis

The Tribunal proceeded in structured steps addressing exemption, classification and marketability (the central matters remitted or in dispute).

1. Exemption under Notification No. 67/95-C.E. and Rule 6 (Cenvat Credit Rules)

The appellants contended that the sugar syrup was exempt under the proviso to Notification No. 67/95-C.E. where intermediate products used for captive consumption are entitled to full duty exemption provided the manufacturer has discharged obligations under Rule 6 of the Cenvat Credit Rules in respect of exempted final products.
The Tribunal rejected the appellants' plea because the proviso applies only where a manufacturer, using common Cenvat-credit-availed inputs, manufactures both dutiable and exempted final products and has complied with Rule 6 for the exempted products. The Tribunal noted it was not established on the record whether the appellants throughout the dispute periods manufactured only exempted final product or also manufactured dutiable final product using common inputs and had discharged Rule 6.
The Tribunal examined the Sakthi Sugars Ltd. decision cited by the appellants and concluded that its ratio did not apply to the present facts.

2. Classification under sub-heading 1702 90 90

Sub-heading 1702 90 90 covers "sugar syrup blends containing in the dry stage 50% by weight of fructose." The Tribunal held that to classify a product under this sub-heading, the product must contain 50% by weight fructose in dry state.
The appellants consistently pleaded that the fructose content was less than 50% and produced a test report from Shriram Institute of Industrial Research supporting that contention.
The Tribunal noted that Commissioner (Appeals) did not adjudicate this scientific plea and that the Department did not produce evidence that samples had been tested by CRCL to confirm 50% fructose content. The Tribunal found that earlier payments of duty did not amount to acceptance that the goods met the sub-heading description, relying on Metlex and Bonanzo authorities.
Accordingly, the Tribunal held classification under 1702 90 90 was not sustainable due to absence of evidence proving the required fructose composition in dry state.

3. Marketability

The Tribunal reiterated the settled law (citing Bata India) that marketability must be established for the product in the condition in which it emerges from the manufacturer.
The Tribunal criticized Commissioner (Appeals) for relying on market sales of "invert sugar syrup" produced by M/s. Dhampur Speciality Sugars Ltd. to infer marketability of the appellants' syrup. The Tribunal held such presumption was legally incorrect unless identity of the products is shown.
The Tribunal explained that chemically invert sugar is obtained by hydrolysis of sucrose into glucose and fructose and that chemical testing is necessary to distinguish ordinary cane sugar syrup from invert sugar syrup. No such chemical testing was done for the appellants' syrup; therefore presuming it to be invert sugar syrup was erroneous.
The Tribunal expressly found that authorities cited by the Revenue (Gujarat Narmada, Nicholaas Piramal, Medley) were not applicable to the facts because the marketability of the appellants' product in its emerged condition was not established.
Consequently, even if classification were assumed, marketability was not proved and excise liability could not be sustained on that basis.

4. Penalties

The Tribunal considered submissions that the dispute involved interpretation and that appellant conduct (payment till June 2008 and later cessation after intimation) did not warrant penalties. The Tribunal's ultimate conclusion to set aside the impugned orders implicitly addresses the unsustainability of duty demands and related penalties; the opinion does not separately detail further adjudication of penalties beyond setting aside impugned orders and allowing appeals with consequential relief.

Holding and Implications

Holding: The Tribunal set aside the impugned orders and allowed the appeals with consequential relief. The core rulings by the Tribunal are:

The classification of the sugar syrup under sub-heading 1702 90 90 is not sustainable because the Department produced no evidence that the fructose content in dry state was 50% by weight.
There is no evidence that the sugar syrup, in the condition in which it emerges from the appellants' factories, is marketable; therefore the goods cannot be held excisable on that basis.
The appellants' plea for exemption under Notification No. 67/95-C.E. (proviso) was not accepted because the requisite factual matrix (manufacture of both exempted and dutiable products using common Cenvat inputs and compliance with Rule 6 for exempted products) was not established on records.

Implications:

Direct effect: The impugned orders confirming duty, interest and penalties were quashed; the appeals were allowed and the appellants are entitled to consequential relief as ordered by the Tribunal.
No broader or new legal precedent is announced by the Tribunal beyond application of existing authorities and established principles: (a) classification requires evidence matching tariff description (50% fructose in dry state for sub-heading 1702 90 90), and (b) marketability must be demonstrated in the condition in which the product emerges. The Tribunal emphasized the need for chemical testing and evidentiary support rather than reliance on marketability of other manufacturers' products.

(Dictated and pronounced in open Court)

Show all summary ...

[Order per : Rakesh Kumar, Member (T)]. - The facts leading to filing of these appeals are, in brief, as under.

1.1 The appellants M/s. Rishi Bakers Pvt. Ltd., M/s. Ramakrishna Bakers Pvt. Ltd. and M/s. Swati Biscuit Manufacturing Co. are manufacturers of biscuits chargeable to Central Excise duty under heading 1905 of the Central Excise Tariff. Shri Prakash Chand Talreja is the Director of M/s. Rishi Bakers Pvt. Ltd., Shri Rajiv Talreja is the Director of M/s. Ramakrishna Bakers Pvt. Ltd. and Shri Om Prakash Shyamdasani is the partner of M/s. Swati Biscuit Manufacturing Co. The period of dispute in the appeal of M/s. Rishi Bakers Pvt. Ltd. is from January 2009 to June 2009. The period of dispute in the case of appeal filed by M/s. Ramakrishna Bakers Pvt. Ltd. is February 2010 to June 2010 and period of dispute in the case of M/s. Swati Biscuit Manufacturing Co. is from January 2002 to June 2009. During this period, the biscuits in packaged form with per kg retail price equivalent not exceeding Rs. 100/- were fully exempt from duty. The appellant during some period were manufacturing only the exempted biscuits and during other period exempted as well as dutiable biscuits. For manufacture of the biscuits, the appellant prepare a sugar syrup by dissolving cane sugar in water at 108 degree Celsius temperature and adding very small quantity of citric acid. This sugar syrup was being used in the manufacture of the biscuits. The Department was of the view that since biscuits of retail sale price equivalent not exceeding Rs. 100/- per kg. were fully exempt from duty, the benefit under exemption Notification No. 67/2005-C.E. would not be admissible in respect of sugar syrup. The Department was also of the view that this sugar syrup is classifiable under sub-heading 1702 90 90 and is also marketable. It is on this basis that show cause notices were issued for demand of duty in respect of clearances of the sugar syrup for captive use during the above-mentioned periods. The duty demands were confirmed by the Assistant Commissioner along with interest and penalties were also imposed on the appellant companies under Section 11AC. Beside this, penalty under Rule 26 of the Central Excise Rules, 2002 were imposed on the Directors/Partners of the above-mentioned appellant companies. On appeals being filed to Commissioner (Appeals) against the Assistant Commissioner’s order, the Commissioner (Appeals) by common order-in-appeal dated 25-3-2010 and 26-3-2010 dismissed the appeals. In the appeals filed before the Commissioner (Appeals), one of the pleas of the appellants was that the sugar syrup is not classifiable under heading 1702 90 90, as per the test report of Shri Ram Institute of Industrial Research, the Fructose content of the syrup is less than 50% while for classification under sub-heading 1702 90 90 the fructose content must be at least 50%, but this plea was not accepted. The appellant filed appeals to the Tribunal against these the orders dated 26-3-2010 and 25-3-2010 of the Commissioner (Appeals). The Tribunal remanded the matter to original Adjudicating Authority for de novo adjudication. In de novo adjudication orders, the Tribunal directed the original Adjudicating Authority to go into the question of marketability of the product in dispute i.e. sugar syrup and not of the final product as had been done in first round of adjudication, when the marketability of the sugar syrup had been presumed on the basis of the marketability of the biscuits.

1.2 In de novo adjudication proceedings, the original Adjudicating Authority again confirmed the duty demands holding that the sugar syrup, in question, is marketable and also held that the goods, in question, are classifiable under sub-heading 1702 90 90.

1.3 On appeals have filed to Commissioner (Appeals) against these orders, the Commissioner (Appeals) by a common order-in-appeal dated 30th August, 2012 dismissed the appeals. Against this order of the Commissioner (Appeals) these appeals have been filed along with stay application. The Tribunal vide stay order dated 5th March, 2013 directed each of the appellant company - M/s. Rishi Bakers Pvt. Ltd., M/s. Ramakrishna Bakers Pvt. Ltd. and M/s. Swati Biscuit Manufacturing Co. to deposit an amount of Rs. 1,00,000/- within a period of four weeks for compliance with the provision of Section 35F and subject to this pre-deposit being made, the requirement of pre-deposit of balance amount of duty demand confirmed, interest and penalty by the appellant companies and the requirement of pre-deposit of penalty by the Directors/Partner of the appellant company/firm would stand waived and its recovery stayed during the pendency of the appeals. The appellant, thereafter, complied with this stay order.

1.4 Subsequently, the Tribunal vide stay order dated 4thFebruary, 2014 extended the stay order against which the Department filed appeal before Hon’ble Allahabad High Court. Hon’ble Allahabad High Court vide order dated 25-9-2014, while not interfering with the Tribunal’s order extending the stay, directed the Tribunal to decide these matters within a period of six months from the date of the order. Accordingly, these appeals have been taken up for final hearing.

2. Heard both the sides.

3. Shri M.H. Patil, Advocate, the learned Counsel for the appellant, pleaded that in the impugned order the Commissioner (Appeals) has wrongly given a finding that the appellant have not disputed that the product, in question, is invert sugar syrup and is classifiable under heading 1702 90 90, that not only in the appeals before the Tribunal, but also in the appeals filed before the Commissioner (Appeals), the question of classification of the goods, in question, under the sub-heading 1702 90 90 has been disputed by pleading that the fructose content of the sugar syrup is less than 50% and in this regard reliance has been placed on the test report of Shri Ram Institute of Industrial Research, that no finding has been given by the Commissioner (Appeals) on this plea, that Department has also never got the sample of the sugar syrup tested for fructose content without which the Department could not presume that the fructose content is less than 50%, that even in respect of the question of marketability, the Commissioner (Appeals) has wrongly affirmed the original Adjudicating Authority’s orders which had relied upon the sale of invert sugar syrup by Dhampur Speciality Sugars Ltd. to M/s. Britannia Industries, M/s. J.B. Mangaram Food Industries and M/s. ITC Ltd. which is wrong, as the Tribunal in the remand order had directed original Adjudicating Authority to ascertain the marketability of the sugar syrup being prepared by the appellant and the marketability of the sugar syrup, in question, cannot be presumed on the basis of marketability of the invert sugar syrup being manufactured and sold by others, that when the sugar syrup is not marketable, there is no question of its excisability, even if it is presumed that it is classifiable under heading 1702 90 90, that in any case, the sugar syrup being manufactured is fully exempt from duty under Notification No. 67/95-C.E., as in terms of proviso to the exemption notification, this exemption is applicable when the manufacturer also manufactures dutiable and exempted final product and in respect of exempted final product, the obligation under Rule 6 of the Cenvat Credit Rules, 2001 has been discharged, that in this case the appellants have not taken Cenvat credit in respect of the inputs used in the manufacture of exempted biscuits and hence in respect of the sugar syrup, the exemption under this notification would be available and that in view of the above submissions, the impugned orders are not sustainable. Shri Patil also pleaded that since the dispute in this case pertains to interpretation, the penalty on the appellant company as well as on Director was not called for, as earlier, the appellant were paying duty in respect of captive clearance of sugar syrup till June 2008 and thereafter, after intimating the Department, they stopped the payment of duty of the sugar syrup.

4. Shri R.K. Grover, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that the appellants have not disputed the classification of the sugar syrup under heading 1702 90 90 and that since similar goods were being sold by M/s. Dhampur Speciality Sugars Ltd. to M/s. Britannia Industries, M/s. J.B. Mangaram Food Industries and M/s. ITC Ltd., the goods, in question, have to be treated as marketable. Shri Grover cited the judgments of Nicholas Piramal India Ltd. v. CCE, Mumbai reported in (S.C.), wherein it was held that shelf-life of product is not a relevant factor to test marketability unless it is shown that product has absolutely no shelf-life or shelf-life is such that it is not capable of being bought or sold during that shelf-life and also in the case of Gujarat Narmada Valley Fert. Co. Ltd. v. CCE & Cus. reported in (S.C.), wherein it was held that actual sale is not necessary but articles must be capable of being sold in market or known in market as goods and in this regard the Apex Court had relied upon its earlier judgment in the case of Bhor Industries Ltd. v. CCE, Bombay reported in (S.C.) and Medley Pharmaceuticals Ltd. v. CCE & Cus, Daman reported in (S.C.). He therefore pleaded that the sale of invert sugar syrup by Dhampur Speciality Sugars Ltd. to M/s. Britannia Industries, M/s. J.B. Mangaram Food Industries and M/s. ITC Ltd. shows that this sugar syrup, in question, is marketable.

5. In rejoinder Shri M.H. Patil cited the judgment of the Apex Court in the case of Bata India Ltd. v. CCE, New Delhi reported in (S.C.) and pointed out to para 18 of the judgment wherein it has been held that test of marketability is that the product which is made liable to duty, must be marketable in the condition in which it emerges. He pleaded that in this case no evidence has been produced to prove that the sugar syrup as made by the appellants is marketable in the condition in which it emerges and that merely on the basis that the “invert sugar syrup” made by Dhampur Speciality Sugars Ltd. is marketable, it cannot be presumed the sugar syrup made by the appellant is marketable.

6. We have considered the submissions from both the sides and perused the records.

7. The dispute in the present case is as to whether sugar syrup made by the appellant for captive use in the manufacture of exempted biscuits is chargeable to Central Excise duty under sub-heading 1702 90 90 of the Central Excise Tariff. The Department’s contention is that since the sugar syrup is used in the manufacture of the exempted biscuits, the benefit of Notification No. 67/95-C.E. would not be available. In this regard, the contention of the appellant is that in terms of the proviso to Notification No. 67/95-C.E., the full duty exemption to intermediate products being used for captive consumption is available if a manufacturer discharges the obligation under Rule 6 of the Cenvat Credit Rules. We do not accept this plea, as in terms of proviso to Notification No. 67/95-C.E., the full duty exemption to intermediate product is available under this notification, even if the manufacturer has manufactured, in addition to exempted final product, a dutiable final product also by using common Cenvat credit availed inputs and in respect of exempted final product, he has discharged the obligation prescribed under Rule 6 of the Cenvat Credit Rules. In this case, it is now known as to whether the appellant throughout during the period of dispute, were manufacturing only exempted final product or along with the exempted final product were also manufacturing dutiable final product. The proviso to notification is applicable only in a situation where by using common Cenvat credit availed inputs, a manufacturer manufactures dutiable as well as exempted final product>and in respect of the exempted final product, the obligation under Rule 6 of the Cenvat Credit Rules has been discharged. Shri Patil in this regard has cited the judgment of the Tribunal in the case of Sakthi Sugars Ltd. v. CCE, Salem reported in (Tri.-Chennai). We have gone through this judgment. In our view ratio of this judgment is not applicable to the facts of this case.

8. Next comes the question of classification. The Department has classified the product, in question, under sub-heading 1702 90 90. Sub-heading 1702 90 90 comes under the 6 digit sub-heading 1702 90 which covers “other sugars including invert sugar and sugar syrup blends containing in the dry stage 50% by weight of fructose”. The goods, in question, are sought to be classified under 1702 90 90 as “sugar syrup blends containing in dry stage, 50% by weight of fructose”. In our view for classification as “sugar syrup blend” in this sub-heading the product must contain 50% by weight of fructose sugar in dry state. In these cases, the appellant’s plea from the very beginning has been that the fructose sugar content is less than 50% and in this regard they have produced the test report of Shriram Institute of Industrial Research. It is seen that the Commissioner (Appeals) has not given any finding on this plea. Not only this, there is no evidence to show that before seeking classification of the goods, in question, under sub-heading 1702 90 90, the samples drawn from the goods had been got tested by the CRCL to confirm as to whether the fructose content of the goods, in question, in dry stage is 50% by weight. Just because the appellant during period till June 2008 were paying duty on the goods by classifying the same under sub-heading 1702 90 90, it cannot be presumed that they had accepted that the goods, in question, conform to the description of sugar syrup blends of sub-heading 1702 90 for which the sugar syrup in dry stage must contain 50% by weight of fructose. The Apex Court in the case of Metlex (I) Pvt. Ltd. v. CCE, New Delhi reported in (S.C.) has held that filing of classification list mistakenly does not mean that party has to pay duty, if in law, he is not bound to pay duty. Same view has been taken by the Apex Court in its judgment in the case of Bonanzo Engg. & Chemical P. Ltd. v. CCE reported in (S.C.). In view of this, we hold that the classification of the goods under sub-heading 1702 90 90 is not sustainable, as absolutely no evidence has been produced by the Department to show that the fructose content of the goods, in question, in dry state was 50%.

9. Even if it is assumed that the goods, in question, are covered by sub-heading 1702 90 90, for attracting Central Excise duty the goods must be proved to be marketable. The Tribunal had remanded this matter to Commissioner (Appeals) for examining the question of marketability of the goods, in question. In this regard it is settled law that the marketability of a product has to be established in the condition in which it emerges. In this regard the Apex Court in the case of Bata India Ltd. v. CCE, New Delhi (supra) has held that the test of marketability is whether product is marketable in condition in which it emerges. In this regard the marketability of the goods produced by a particular manufacturer cannot be presumed on the basis of the marketability of the similar goods in different condition being produced by another manufacturer, unless it shown that the two products are identical. In these cases, the Commissioner (Appeals) has held that the goods, in question, to be marketable only on the basis that the “invert sugar syrup” being manufactured by M/s. Dhampur Speciality Sugars Ltd. is being sold to M/s. Britannia Industries, M/s. J.B. Mangaram Food Industries and M/s. ITC Ltd. In our view this basis of holding that the goods, in question, are marketable is absolutely wrong, as it has been presumed that the sugar syrup being made by the appellants is identical to the “invert sugar syrup” being made by M/s. Dhampur Speciality Sugars Ltd. for which there is no basis. Chemically, invert sugar is obtained by Hydrolysis of cane sugar (sucrose, a disaccharide with specific rotation of + 66.5°) and the same is a mixture of glucose (with specific rotation of +52.7°) and fructose (with specific rotation of - 92°), with net specific rotation of - 19.7°. The process of hydrolysis of cane sugar (which is dextrorotatory i.e. with rotation of + 66.5°) is also called inversion, as the mixture of glucose and fructose formed by this process is levorotatory with sp. Rotation of - 19.7° and for this reason the mixture of glucose and fructose formed by hydrolysis of cane sugar is called invert sugar. The invert sugar has longer shelf life. Whether a sugar syrup is ordinary cane sugar syrup or is invert sugar syrup has to be ascertained by chemical test which has not been done. It is, therefore, totally wrong to presume a given sugar syrup as invert sugar syrup without test. The judgments of the Apex Court in the cases of Gujarat Narmada Valley Fert. Co. Ltd. v. CCE & Cus. (supra), Nicholaas Piramal India Ltd. v. CCE, Mumbai (supra) and Medley Pharmaceuticals Ltd. v. CCE & Cus, Daman (supra) cited by the learned DR are not applicable to the facts of this case.

10. In view of the above discussion, we hold that neither there is any evidence to prove that the goods, in question, are classifiable under 1702 90 90 nor there is any evidence to prove that the goods, in question, in form in which they come into existence in the appellant’s factories, are marketable. We, therefore, hold that the impugned order is not sustainable. The same is set aside. The appeals are allowed with consequential relief.