1979 (11) TMI 258 - Commissioner - Central Excise

Summary

Issues:
1. Whether certain in-process materials used in the manufacturing process are liable to excise duty.
2. Whether the demands for excise duty were valid and timely.
3. Whether the materials in question can be classified as "goods" under the Central Excises and Salt Act, 1944.

Analysis:
1. The case involved a representation by a company against demands of excise duty on Jute Batching Oil, Sizing paste, and Steam used for captive consumption during a specific period. The company argued that these materials were in-process substances and not marketable goods, thus not liable for duty. The company had followed prescribed procedures for denaturing the Jute Batching Oil and using the sizing paste immediately after preparation. The company contended that the demands were raised incorrectly by the Central Excise Inspector, and they had challenged the demands through representations to the Assistant Collector, seeking a refund of the duty paid under protest.

2. Subsequently, additional demand letters were issued to the company based on an increase in the duty rate, which the company opposed citing Notification No. 118/75 and the time limitation under Rule 10 of the Central Excise Rules, 1944. The company requested the set aside of the demands and a refund of the duty paid, emphasizing the procedural irregularities in the issuance of demands without proper orders and hearings.

3. After a personal hearing and review of the case records, the Commissioner held that the emulsified R.D.O. and sizing paste, due to their short shelf life and non-marketable nature, did not qualify as goods under the Central Excises and Salt Act, 1944. Therefore, these materials were considered in-process substances and not subject to excise duty. However, the steam, being a commercially known and marketed product to a limited extent, was liable for duty as per government orders, but the duty already paid was remitted. Consequently, the demand letters were set aside, and the duty paid on the three products was ordered to be refunded, while the demands not honored were to be vacated.