2008 (9) TMI 734 - AT - Central Excise

Wires - Defective insulation wires - Marketability/Excisability - Held that - marketable short length wires and cables are not to be confused with waste and scrap which are excisable - there is no material on record to prove that the impugned goods are marketable, the same have to be held as no excisable - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of goods as excisable or non-excisable based on marketability and previous tribunal decisions.

Analysis of the Judgment:

Issue 1: Classification of Insulated Wires and Cables as excisable or non-excisable:
The Appellant, represented by Shri A.D. Roy, argued that defective Insulated Wires and Cables, when cut into smaller lengths and sold as scrap, are not marketable as cables or conductors and hence should not be classified as excisable. The Appellant cited the Tribunal's decision in the case of Finolex Cables Ltd. v. C.C Ex, Pune, which established that non-marketable short length wires and cables are not excisable. Additionally, the Appellant referred to a previous decision in their own case where the Tribunal ruled similarly on the non-excisability of short length non-marketable wires and cables. The Appellant clarified that the impugned goods are sold as scrap due to their non-marketability, which exempts them from excise duty.

Issue 2: Burden of proof on marketability and applicability of excise duty:
The Respondent, represented by Shri J.A. Khan, argued that marketable short length wires and cables should be distinguished from waste and scrap, which are excisable as per the decision in the case of Hitech Cable v. C.C.E. The Respondent pointed out that the lower Appellate Authority's decision emphasized this distinction. However, the Tribunal found no evidence in the show cause notice or case records to support the Department's claim that the impugned goods were marketable. The Tribunal highlighted that the burden of proving marketability lies with the Department before imposing excise duty, as established by legal principles.

Final Decision:
Considering the lack of evidence proving marketability of the impugned goods and relying on precedent decisions favoring the Appellant, the Tribunal concluded that the goods should be classified as non-excisable. The Tribunal referenced the Larger Bench decision in the case of M/s. Finolex Cables Ltd. to support this ruling. Consequently, the impugned Order was set aside, and the Appeal was allowed in favor of the Appellant.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal principles governing the classification of goods for excise duty, and the Tribunal's decision based on precedent and burden of proof considerations.