1985 (3) TMI 269 - AT - Central Excise

Summary

Issues:
Interpretation of Notification No. 23/55 for exemption of coated precipitated chalk from Central Excise duty.

Analysis:
1. The appeal challenged an order by the Collector of Central Excise (Appeals) upholding the exemption claim of M/s. Searsole Chemicals Ltd. for coated precipitated chalk under Notification No. 23/55. The Assistant Collector had initially denied the exemption, which was overturned by the Appellate Collector.

2. The dispute centered around whether coated precipitated chalk falls under the exemption category listed in the notification, specifically under the entry for minerals like chalk. The Respondents sought exemption based on their classification list, which was rejected by the Assistant Collector without providing reasons.

3. The Collector (Appeals) based his decision on a previous order involving the same product, concluding that coated precipitated chalk qualifies as precipitated chalk and is covered by the notification entry. The Departmental Representative argued that the coating process altered the nature of the substance, making it distinct from uncoated chalk.

4. The Respondents contended that precipitated chalk, including the coated variety, should be considered a mineral filler eligible for exemption. They referenced technical literature and industry practices to support their claim, emphasizing that the coating enhanced the properties of the filler.

5. The Tribunal analyzed the manufacturing process of precipitated chalk, highlighting the detailed steps involved in its production. The process indicated that precipitated chalk is a prepared mineral product, making coated precipitated chalk a processed form of the mineral.

6. The Tribunal considered the technical aspects of coating precipitated chalk to improve its properties, noting that coated grades are used for specific applications to enhance flow and physical characteristics. The inclusion of coated precipitated chalk under the notification was deemed justified based on its classification as a mineral filler.

7. The Tribunal upheld the Collector (Appeals) decision, ruling in favor of the Respondents and rejecting the appeal. The judgment affirmed that coated precipitated chalk qualifies for exemption under Notification No. 23/55 as a mineral filler, meeting the criteria outlined in the notification.