2005 (5) TMI 396 - AT - Central Excise

Summary

Issues:
1. Appeal against setting aside duty demand for Acid Slurry manufactured on job work basis.
2. Eligibility for duty exemption under Notification No. 88/88-C.E. for Acid Slurry manufactured in own unit.
3. Liability to discharge duty on Acid Slurry used in manufacturing exempted product under Notification No. 214/86.
4. Adjustment of amount paid at the time of clearance of Detergent Powder towards duty on Acid Slurry.
5. Imposition of penalty.

Analysis:
1. The case involved two appeals by the Revenue against setting aside the duty demand for Acid Slurry manufactured on a job work basis by M/s. Shiv Gram Udyog Sansthan. The Revenue contended that Acid Slurry used in manufacturing exempted Detergent Powder should still be subject to Excise duty under Notification No. 214/86.

2. The Tribunal examined the eligibility for duty exemption under Notification No. 88/88-C.E. for Acid Slurry manufactured in the appellants' own unit. It was found that the appellants fell within the categories specified in the notification, making Acid Slurry manufactured in their own unit eligible for duty exemption under this notification. Thus, no duty was found payable for Acid Slurry manufactured in their own unit.

3. However, concerning Acid Slurry manufactured from the job worker under Notification No. 214/86, the Tribunal held that the respondents were liable to discharge duty on Acid Slurry used in manufacturing the exempted product, Detergent Powder. The Tribunal agreed that the amount paid at the time of Detergent Powder clearance should be adjusted towards any duty demand on Acid Slurry.

4. The Tribunal concluded that no penalty was warranted in this case and remanded the matters to the original authority to re-compute the duty demand based on the directions provided in the order. Both appeals were disposed of accordingly, with the Revenue's appeal rejected in part and upheld in part based on the specific circumstances and notifications applicable to the manufacture and use of Acid Slurry.