2004 (4) TMI 359 - AT - Central Excise

Summary

Issues:
Claim for refund of duty rejected by Commissioner (Appeals).

Analysis:
The case involved an appeal filed by M/s. J.C.T. Ltd. against the rejection of their claim for the refund of duty by the Commissioner (Appeals). The company manufactures Polyster/Nylon filament Yarn/Chips, including Nylon Filament of 210 denier exempt from Central Excise duty. However, during a visit by Central Excise Officers, it was discovered that nylon chips arising during the manufacturing process of nylon filament of 210 denier were subject to Central Excise duty. The company paid the duty on captive consumption of nylon chips and filed a refund claim, which was rejected by the Asst. Commissioner and upheld by the Commissioner (Appeals).

During the proceedings, the Appellants argued that the nylon chips were not marketable as they required specific packaging and had a short shelf life, getting oxidized upon contact with air. However, the authorities found that the nylon chips were indeed marketable as they were cleared by the Appellants on payment of duty. The Commissioner (Appeals) also noted that the nylon chips could be used captively or taken out from the main manufacturing line for dispatch, requiring a cover of spray of nitrogen for transportation. The judgment emphasized that marketability does not depend on whether the product is packed when captively consumed, as long as it is capable of being brought to the market for buying and selling.

Ultimately, the Tribunal agreed with the findings of the Commissioner (Appeals) that the nylon chips manufactured by the Appellants were capable of being marketed, as evidenced by the fact that the company itself marketed the product. The Revenue successfully demonstrated that the nylon chips were marketable, leading to the rejection of the appeal for the refund of duty.