2006 (7) TMI 488 - AT - Central Excise

Summary

Issues:
Challenge to Tribunal's order directing pre-deposit, classification of intermediate products, marketability of products, time-bar on demand, financial position for deposit.

Analysis:
1. Challenge to Tribunal's Order: The appellants challenged the Tribunal's order directing pre-deposit of 25% of the confirmed demand of duty. The High Court directed a re-hearing of the stay application. The appellants contested the demand on merits and limitation. The products emerging at the intermediate stage were classified as organic/inorganic compounds of precious metals, attracting duty under Heading 2843.00 of the Central Excise Tariff Act, 1985.

2. Marketability of Intermediate Products: The main contention was that the intermediate products were not marketable and thus not dutiable. The appellants argued that these products were not brought to the market for sale, being consumed captively. They emphasized the difference in quality/purity compared to the salts sold, asserting that the intermediate products had not attained excisable status.

3. Time-Bar on Demand: The appellants argued that the demand was time-barred under Section 11A, as the Revenue had previously investigated the entire manufacturing process, including the emergence of intermediate products. They contended that raising the demand beyond the normal limitation period was impermissible.

4. Financial Position for Deposit: The appellants highlighted their poor financial position as a declared BIFR unit, pleading inability to deposit the duty amount. They sought unconditional stay, emphasizing their financial constraints.

5. Classification and Precedents: Legal arguments cited Supreme Court decisions to support contentions on marketability, purity, and classification of products. The reference to precedents aimed to establish the non-marketable nature of the intermediate products, challenging the Commissioner's reasoning.

6. Decision and Compliance: Considering the contentions as contentious and arguable, the Tribunal directed the appellants to furnish a bank guarantee of 25% of the confirmed duty amount within six weeks. Compliance was to be reported by a specified date. Subject to this compliance, pre-deposit of the balance duty amount and penalties was dispensed with, and recovery stayed during the appeal's pendency. The decision aligned with a similar case precedent involving furnishing a bank guarantee.

This detailed analysis encapsulates the issues raised, legal arguments presented, relevant case law references, and the Tribunal's decision, providing a comprehensive overview of the judgment.