2009 (4) TMI 590 - AT - Central Excise

Summary

Issues:
1. Classification of product for duty under Tariff Heading 2833.90
2. Contention of the assessee regarding non-marketability of the product
3. Allegation of duty evasion and penalty imposition by the Revenue
4. Time-barred demand and suppression of intent

Analysis:
1. The Revenue demanded duty for a product classified as sodium bi-sulphate under Tariff Heading 2833.90. The adjudicating authority confirmed the duty and penalty, which was challenged by both the assessee and the Revenue. The Commissioner (Appeals) upheld the demand but set aside the penalty. The assessee argued that the product was waste material drained out after treatment, not marketable, and no sale occurred, making the demand unsustainable. The Revenue contended that duty was payable as the goods were drained out without maintaining statutory records.

2. The assessee maintained that they cleared inputs to job workers, received excisable goods, and drained out sodium bi-sulphate as waste without any marketable sale. They argued that the Revenue did not communicate sample results from 1994, and the demand for the period 1999-2000 was time-barred, with no intent to evade duty. They also claimed that remission of duty provisions did not apply. The Revenue's position was that the drained goods were excisable, duty was rightly demanded due to evasion, and penalty was justified for non-compliance with record-keeping.

3. The Tribunal found that the goods in question were indeed sodium bi-sulphate drained out as waste, uncontested by the parties. However, there was no evidence of marketability or sale of the drained material. As no sale occurred, the demand was deemed unsustainable, leading to setting it aside and allowing the assessee's appeal. Consequently, since the demand was not upheld, the question of penalty imposition did not arise, resulting in the dismissal of the Revenue's appeal.

4. In conclusion, the Tribunal ruled in favor of the assessee, setting aside the demand for duty on sodium bi-sulphate due to lack of marketability and absence of sale, thereby dismissing the Revenue's appeal for penalty imposition. The judgment highlighted the importance of evidence and marketability in determining the sustainability of duty demands, ultimately leading to a favorable outcome for the assessee.