2010 (3) TMI 687 - AT - Central Excise

SSI exemption - Respondent having manufactured brass ingots, it is not eligible for SSI exemption since the Notification in question grants exemption to brass billets of less than 5 kgs - authorities committed error without ascertaining the goods manufactured by the appellant which was actually brass billets - Adjudicating Authority has overlooked the characteristics of the goods and has simply gone by the BIS specification Held that - no definition of the term brass ingots and billets in Central Excise Tariff of HSN classification - goods manufactured by the appellant was alloy of copper and zinc - no examination of characteristics of the goods done - Finding no evidence to say the Appellate order was perverse, we uphold the order of the learned late Authority below. In the result, Revenue appeal is dismissed.

Summary

Issues: Eligibility for SSI exemption based on classification of manufactured goods as brass billets or ingots.

Analysis:
1. The Revenue contended that the Respondent, manufacturing brass ingots, was not eligible for SSI exemption as the exemption applied to brass billets of less than 5 kgs. The authorities erred by not properly identifying the goods manufactured by the appellant. The Adjudicating Authority solely relied on BIS specification and overlooked the actual characteristics of the goods, which were sold as ingots. Expert opinion and statements supporting the goods as ingots were disregarded. The Revenue appealed against the unjust benefit of SSI exemption granted to the respondent.

2. The Respondent's counsel argued that there was no specific definition of billets or ingots for brass items, unlike iron and steel items. The Adjudicating Authority correctly interpreted the meaning from IS specification. The counsel emphasized that the characteristics of the product, such as workability, remelting capability, and composition, were crucial in determining whether the goods were billets or ingots. Mere use of the goods in a molding process did not alter their classification. The counsel asserted that brass ingots and billets were considered the same in the market.

3. Upon hearing both sides and examining the records, the Tribunal observed that the Adjudicating Authority conducted a thorough inquiry into the characteristics of the goods. As there was no specific definition in the Central Excise Tariff, the Authority referred to BIS specifications to differentiate between brass ingots and billets. The Authority concluded that the goods manufactured by the appellant, being an alloy of copper and zinc, met the criteria of billets based on their composition and weight. The incomplete report from the Metallurgical Department was deemed insufficient as it did not analyze the essential characteristics of the goods.

4. The Tribunal upheld the decision of the Adjudicating Authority, emphasizing that the distinction between billets and ingots was adequately addressed in the adjudication order. The Revenue's argument that billets and ingots were different was not substantial enough to overturn the findings. The Appellate Authority concurred with the Adjudicating Authority's reasoning and found no grounds to consider the appellate order as flawed. Consequently, the Revenue's appeal was dismissed, affirming the lower authority's decision.