Explanation to Sec 2(d) & SC's coflicting judgement.

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Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2010 Explanation to Sec (2d) introduces the concept of 'deemed marketability'-
by providing that 'goods' include any article, material or substance which is capable of being bought & sold for consideration and such goods shall be deemed to be marketable.
However,
In CCEx V Dhakad Metals Pvt Ltd. (2010) 257 elt E139 (sc), held that –
Copper Sldge arising in the process of manfacture of zinc sulphate (agricultural grade) is a ‘waste’. Merely because that can be sold in the market, it doesn’t become marketable; as marketability of product totally different from disposal of waste.
My Q. is that since waste is realising consideration , hence by explanation to sec 2(d) it should be deemed marketable whereas SC has different view.
Which is more correct ?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

04 December 2010 Realising considertion doesnot mean the product is marketable. marketability is different word, even goods having short life are not goods if not marketable, although some consideration is recived for this also.

The item must be such that it is "capable of being" bought or sold. This is the test of marketability. The goods must be known in the market.

Rajesh Kumar

Rajesh Kumar (Expert)

04 December 2010 The Supreme Court judgment must have dealt with time period when this explanation was not there.
In present, whatever is sold is marketable.

Querist : Anonymous

Querist : Anonymous (Querist)

04 December 2010 But sir (CA Shailesh kumar bhagat) Explanation of sec 2(d) says that any article which is capable of being bougt & sold for consideration, such goods shall deemed to be marketable.
the interpretation which I derive is that for deciding marketability the condition is that whether it is realizing consideration or not, if it is realizing consideration it is marketable.
Circular No. 904/24/09-cx dt- 28-10-2009 also says that-
Baggage, alluminium/zinc dross and other such products termed as waste, residue, or refuse which are arising during course of manufacture and are capable of being sold for consideration would be excisable goods and chargeable for payment of excise duty.

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