PFIZER LTD. Vs. CCE

JUDGEMENT

(1.) The question for consideration in this appeal is the liability to duty of the substance that the appellant manufacturers. This consists of a solution 66% of sugar and water to which added quantities of sodium citrate, sodium saccharin and sodium benzoate. This syrup is used by the appellant in the manufacture of cough syrup. In the order impugned in the appeal, the Commissioner (Appeals) has held, overruling the Additional Commissioner that the product is marketable and liable to duty.

(2.) In coming to his conclusion that the substance was not liable to duty, the Additional Commissioner had relied upon an order of the Tribunal relating to the same product made by the same manufacturer. In its order in appeal E/2236/97, the Tribunal accepted the contention of the appellant that the presence of sodium saccharin in the substance attracted the provisions of Rule 47 of the Prevention of Food Adulteration Rules, 1955 which prohibited the sale of any food articles (other than those specified therein) which contained sodium saccharin, and relying upon the judgment of the Delhi High Court in Delhi cloth and General Mills Co. v. Joint Secretary 1978 ELT J121 that a commodity cannot be considered marketable if it does not meet the requirements of law regulating its use and exchange, held that the substance was not marketable. In his order, the Commissioner (Appeals) has said that the fact that the substance contains saccharin does not affect its classification in heading 17.02 of the tariff and therefore it is liable to duty.

(3.) The departmental representative, in addition to relying upon this finding, makes the following submissions. To determine marketability a commodity need not be shown to be actually marketed. It is sufficient if it is shown to be capable of being marketed. This requirement would be met if it is shown that the product has some utility. Since the appellant puts the product to use, it is capable of being used. The prohibition contained in Rule 47 of the Prevention of Food Adulteration Rules, 1955 will only be attracted if the appellant sells the goods and this is not done, this is not relevant. He relies upon the decision of the Tribunal in Punjab National Fertilizers and Chemicals Ltd. v. CCE to distinguish the applicability of the judgment of the High Court in Delhi Cloth and General Mills Co. v. Joint Secretary 1978 ELT J121 and the decision of the Tribunal in Gujarat Narmada Valley Fert. Co. Ltd. v. CCE . He cites four decisions of the Tribunal in which sugar syrup has been held liable to duty. He cites a circular No. 226/60/96 -CX dated 3.7.1996 of the Board enclosing opinion of the Chief Chemist of the Central Revenues Control Laboratory, in which the Board has agreed.