2004 (11) TMI 386 - AT - Central Excise

Summary

Issues:
Classification of ceramic moulds under excise duty - applicability of Notification No. 217/86-C.E.

Detailed Analysis:

The case involved the classification of ceramic moulds used for casting stainless steel ingots under excise duty and the applicability of Notification No. 217/86-C.E. The dispute arose when the original authority demanded duty on the captive clearances of ceramic moulds, which the assessee contested, claiming the moulds were not marketable goods and were exempt under a specific notification. The original authority classified the moulds as excisable goods under Heading 69.11, not falling under the exemption notification. The Commissioner (Appeals) overturned this decision, classifying the goods under Heading 69.11 and exempting them from duty under the notification. The Revenue appealed this decision.

During the appeal, the Revenue argued that the moulds were tools or appliances excluded from the notification's applicability. They cited departmental clarifications and circulars to support their position. The respondents argued that the moulds were not marketable and should be classified under a different heading. The Tribunal noted that the excisability and classification of the moulds were not in question during the appeal, as the respondents only sought to uphold the Commissioner (Appeals) decision.

The Tribunal focused on whether the ceramic moulds qualified as "inputs" under the notification. The moulds were used in the production of stainless steel ingots falling under a specific chapter. The notification excluded tools or appliances from the definition of inputs. The original authority considered the moulds as capital goods, but the Commissioner (Appeals) classified them as inputs under Chapter 69. The Revenue contended that the moulds were tools or appliances and, therefore, not eligible for exemption under the notification.

The Tribunal analyzed the exclusionary clause of the notification, which specified that inputs did not include tools, appliances, etc. They noted that tools and appliances were non-perishable items capable of repeated use, unlike the ceramic moulds in question, which were used only once and destroyed after casting an ingot. As the moulds did not fall under the exclusionary clause, they were deemed inputs eligible for exemption under the notification.

Ultimately, the Tribunal upheld the Commissioner (Appeals) decision, rejecting the Revenue's appeal. The classification of the ceramic moulds as inputs under the notification was affirmed, and the duty exemption was upheld.