2004 (5) TMI 592 - AT - Central Excise

Summary

Issues:
Whether the products manufactured by M/s. SBL Private Limited contained alcohol, impacting their liability for Central Excise duty under Chapter 30 of the Central Excise Tariff Act, 1985.

Analysis:
The main issue in this case revolves around determining whether the products manufactured by M/s. SBL Private Limited contained alcohol and thus affected their liability for Central Excise duty. The appellant contended that the items in question did contain alcohol, citing evidence such as certificates from research institutes and test reports confirming the presence of alcohol. They also relied on a judicial pronouncement, specifically the judgment of the Hon'ble Supreme Court in Dabur India v. State of U.P., to support their argument. However, the learned Commissioner of Central Excise, in the impugned order, held that the goods were liable for Central Excise duty as they did not contain alcohol. The Commissioner based this decision on a report from the Central Revenue Control Laboratory stating the samples were "free from Ethyl Alcohol" during a specific period. The Commissioner also distinguished the Supreme Court's decision in the Dabur India case, stating that it was based on alcohol being found in the final product, which was not the case here.

Upon reviewing the evidence and arguments presented, the Tribunal found that the presence of alcohol in the final product was not a prerequisite for attracting the provisions of the Medicinal and Toilet Preparation (Excise Duties) Act, 1955. The Tribunal noted that test reports from private laboratories confirmed the presence of alcohol in the samples drawn during the Show Cause Notice period. Additionally, when the correct testing method was employed later, the Central Revenue Control Laboratory also confirmed the presence of alcohol. The Tribunal emphasized that the failure to detect alcohol earlier was likely due to an incorrect testing method. Moreover, the appellant maintained that the ingredients used for production remained consistent throughout the relevant periods, supported by production records. In light of these findings and legal principles, the Tribunal concluded that the Commissioner's decision was not sustainable on the facts and law, leading to the setting aside of the impugned order and granting relief to the appellants by allowing the appeals.