2003 (3) TMI 432 - AT - Central Excise

Summary

Issues:
Whether Central Excise duty is leviable on parts of Railway Wagons.

Analysis:
The appeal involved a dispute regarding the levy of Central Excise duty on under frames, body sides, ends, roof, and floor as parts of Railway Wagons. The Appellant, a company fabricating wagons for the Indian Railways, argued that an agreement with the Railways entitled them to reimbursement of Excise duty. A show cause notice was issued demanding duty, later reduced to Rs. 1,31,387.20. The Commissioner confirmed the demand and imposed a penalty, leading to the appeal.

The Appellant contended that the Corrigendum reducing the duty was valid, citing administrative circulars limiting the Assistant Commissioner's adjudication powers. They argued that the impugned goods were not marketable as they were intermediate stages in wagon manufacturing, supported by a letter from the Railway Board. The Tribunal had previously remanded a similar case for further adjudication on marketability.

The Departmental Representative countered, stating that the Corrigendum was without jurisdiction, and the goods were distinct, marketable products liable for duty. The Tribunal found the Corrigendum invalid as the Assistant Commissioner lacked authority to issue it, being before the Commissioner for adjudication. Ownership of raw materials was deemed irrelevant for duty imposition, following Supreme Court rulings.

The Tribunal remanded the matter for fresh adjudication, emphasizing the need for a specific finding on the marketability of the goods. It rejected the Appellant's trust argument regarding raw material ownership, emphasizing duty liability on manufactured goods regardless of ownership. The Tribunal concurred with the need for further examination and evidence on marketability, directing both parties to present their case.

The judgment highlighted the importance of proper adjudication procedures and the necessity for a clear determination on whether the goods were distinct commercial items subject to duty. It underscored the legal principles governing Central Excise duty liability and the requirement for thorough examination and evidence presentation in such cases.