COMMNR. OF CENTRAL EXCISE, CHANDIGARH vs M/S. GURDASPUR DISTILLERY

The Supreme Court held that Methane gas produced and used captively by the respondent is not liable to excise duty under the Central Excise Act, 1944, specifically under Section 11A(I) and Rule 173Q of the Central Excise Rules, 1944, as it is not marketable. The Court emphasized that marketability is a crucial criterion for the imposition of excise duty, referencing the precedent in Bhor Industries Ltd. v. Collector of Central Excise. The appeal by the Revenue was dismissed, affirming the findings of the lower authorities that the gas in question was not marketable and thus not subject to excise duty.