2005 (12) TMI 432 - AT - Central Excise

Bricks - Acid resistance clay bricks vis-a-vis fire clay bricks - Dutiability - Pipes - Salt glazed stone pipes

Summary

Issues:
- Duty demands, confiscation, and penalties confirmed under adjudication order
- Classification of Acid Resistance clay bricks
- Differential duty demand based on investigations and test samples
- Commercial identity and technical standards for fire clay bricks
- Classification of Coal Ash as a manufactured product subject to excise duty
- Classification of Stone Pipes as Salt glazed or slip glazed

Analysis:

1. Classification of Acid Resistance clay bricks:
The case involved duty demands for Acid Resistance clay bricks cleared without payment of duty. The appellant claimed these bricks were not "fire clay bricks" but acid resistance bricks based on a test report. The Commissioner held that the appellant misdeclared the bricks with intent to evade duty. The dispute centered on whether the bricks were refractory bricks or fire clay bricks. The Commissioner overruled the appellant's contentions on commercial differences and upheld the duty demand. However, the Tribunal found that the appellant's bricks were used for acid resistance, not high-temperature applications, and did not meet IS standards for fire clay bricks. The HSN notes on refractory goods were not conclusive for equating refractory bricks with fire clay bricks. Thus, the duty demand and penalty were set aside.

2. Classification of Coal Ash:
The issue of classifying Coal Ash as a manufactured product subject to excise duty was raised. The appellant argued that Coal Ash was not a manufactured product and cited previous rulings. The Tribunal concurred, citing a Supreme Court ruling that Coal Ash was not subject to excise duty. Consequently, the duty demand and penalties related to Coal Ash were set aside.

3. Classification of Stone Pipes:
The dispute over Stone Pipes involved whether they were Salt glazed or slip glazed. The Commissioner's finding was based on a test report and Chemical Examiner's opinion, concluding the pipes were slip glazed. The appellant contended that the experimental coating with "GERU" did not make them slip glazed. The Tribunal noted that the Commissioner did not consider all relevant aspects and records, requiring a detailed reconsideration. The issue was remanded for fresh decision after giving the appellant an opportunity to be heard.

4. Penalty Imposition:
The revenue appealed for imposing a penalty equal to the duty demand, citing Section 11AC of the Central Excise Act. The Tribunal rejected this contention, stating that the penalty amount was discretionary, especially when most duty demands were set aside. The revenue's appeal was dismissed.

In conclusion, the Tribunal set aside duty demands and penalties for Acid Resistance clay bricks and Coal Ash, remanded the issue of Stone Pipes classification for reconsideration, and rejected the revenue's appeal for mandatory penalty imposition.