Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2002 (1) TMI AT This

  • Login
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2002 (1) TMI 1261 - AT - Central Excise

Issues involved:
Whether powder of LLDPE/LDPE/HDPE in the manufacture of water storage tanks is chargeable to excise duty.

Comprehensive Analysis:

Issue 1: Chargeability of excise duty on the powder
The Revenue contended that the powder falls under Heading 39.01 of the Schedule to the Central Excise Tariff Act and should be chargeable to excise duty. The Assistant Commissioner initially withdrew the demand, stating that the powder is not a distinct commodity and is not marketable due to its hygroscopic nature. However, the Revenue argued that the conversion of granules into powder constitutes manufacture, citing Chapter Note 6B. They also highlighted that a related company was paying excise duty on a similar powder, indicating marketability. The Respondent disputed marketability, emphasizing the specific nature of the powder produced in their units. They also claimed exemption under Notification No. 1/93-C.E. and cited relevant case law supporting their position.

Issue 2: Marketability and manufacturing process
The Tribunal observed that the conversion of granules into powder qualifies as manufacturing under the Central Excise Tariff. The crucial point of contention was the marketability of the powder. While the Adjudication Orders focused on its hygroscopic nature, no conclusive evidence was presented on its marketability or shelf life. The Tribunal noted that many hygroscopic products are freely marketed. The existence of a related company marketing a similar powder was acknowledged, but evidence of actual marketing was lacking. Considering these gaps, the Tribunal deemed it necessary to remand the matter for further adjudication by the Adjudicating Authority. The Authority was instructed to consider the Notification No. 1/93 exemption and the availability of Modvat credit if the powder is deemed dutiable.

Conclusion
The Tribunal allowed all appeals by remanding the cases to the Adjudicating Authority for a fresh assessment, emphasizing the need for concrete evidence on marketability and proper consideration of relevant exemptions and credits. The decision underscored the requirement for a thorough evaluation of the facts and circumstances before determining the chargeability of excise duty on the powder in question.

 

 

 

 

Quick Updates:Latest Updates