2009 (10) TMI 765 - AT - Central Excise

Summary

Issues:
1. Classification of product as excisable
2. Applicability of extended period of limitation for demand of excise duty and imposition of penalty

Classification of product as excisable:
The main issue in this case revolved around determining whether the product in question, char and dolochar, could be classified as an excisable product and thus subjected to excise duty. The appellant argued, citing precedents, that the product should not be considered excisable. However, the respondent pointed to a Tribunal decision and emphasized the potentiality of the product for generating electricity, supported by a Supreme Court ruling. The lower authorities had already established that dolochar, one of the products, had the potential for electricity generation, leading to its classification as an excisable commodity. The Tribunal noted that un-burnt or partly burnt coal pieces lacking the capacity to produce flame were not excisable goods. Consequently, the Tribunal found no grounds for completely waiving the duty demanded, considering the product's characteristics and potential for electricity generation.

Applicability of extended period of limitation for demand of excise duty and imposition of penalty:
The Tribunal partially allowed the application for stay, considering the financial hardship of the appellants and the Revenue's interest. It directed the appellants to deposit a specified amount within a set period, after which the pre-deposit of the remaining duty and penalty demanded would be waived until the appeal's disposal. This decision aimed to balance the financial concerns of the appellants with the Revenue's interests, providing a temporary relief while ensuring compliance with the duty and penalty requirements.

This judgment from the Appellate Tribunal CESTAT NEW DELHI addressed the classification of the product as excisable and the application of the extended period of limitation for excise duty and penalty demands. It highlighted the importance of the product's characteristics, specifically its potential for electricity generation, in determining its excisability. The Tribunal's decision to partially allow the stay application and set deposit requirements aimed to strike a balance between the parties' interests while ensuring compliance with the duty and penalty obligations.