2010 (7) TMI 973 - AT - Central Excise

Summary

Issues:
Classification of Chlorotetracyclin HCL under Central Excise Tariff Act, 1985; Utilization of Chlorotetracyclin HCL in the manufacture of animal food supplement.

Analysis:
1. Classification of Chlorotetracyclin HCL: The Revenue contended that Chlorotetracyclin HCL manufactured by the assessee should be classified under Heading 2942.00, attracting a duty rate of 15% ad valorem plus special excise duty, as it is not used in antibiotics but in the manufacture of animal food supplements. The assessee argued that they manufactured patent and proprietary medicine under Chapter 30 and bulk antibiotics under Chapter 2941.30, asserting that Chlorotetracyclin HCL was not used in the manufacture of animal food supplements. The Assistant Commissioner visited the plant and observed the manufacturing processes, concluding that CTC-HCL was not used in the production of animal food supplements.

2. Utilization of Chlorotetracyclin HCL: The Revenue alleged that the assessee admitted to using Chlorotetracyclin HCL in the manufacture of animal food supplements based on a letter dated 4-10-1988. However, the assessee clarified that the letter referred to the quantity of Chlorotetracyclin HCL contained in the animal food supplement, not its direct use in manufacturing. The Commissioner (Appeals) supported the assessee's position, noting that the manufacturing process did not indicate the direct use of CTC-HCL in animal food supplements. The lower authorities found no evidence to support the Revenue's claim of direct utilization of CTC-HCL in the production process.

3. Judgment: The Tribunal upheld the lower authorities' decision, rejecting the Revenue's appeal. The Tribunal emphasized that the letter dated 4-10-1988 did not confirm the direct use of CTC-HCL in animal food supplements but only indicated its presence in the final product due to the common manufacturing process shared with other products. The Tribunal found no fault in the findings of the Assistant Commissioner and Commissioner (Appeals) regarding the non-utilization of CTC-HCL in the manufacture of animal food supplements, ultimately dismissing the Revenue's appeal.

In conclusion, the Tribunal affirmed that Chlorotetracyclin HCL was not used in the manufacture of animal food supplements, based on the manufacturing processes observed and the lack of concrete evidence supporting the Revenue's claims. The judgment highlighted the importance of factual evidence and manufacturing processes in determining the classification and utilization of goods under the Central Excise Tariff Act, 1985.