2011 (5) TMI 183 - AT - Central Excise

Demand - Goods are limestone or not -As per Indian Bureau of Mines and the permission granted by the Industries Department, Govt. of Tamilnadu for disposing of the goods in question to needy industries for making coloured gems, lime powder and fertilizer industry, accept the finding of the lower appellate authority that what was sold by the assessees was only waste or residue and not limestone and therefore the provisions of rules invoked in support of the demand are not attracted - Hence, uphold the impugned order and reject the appeal filed by the Department

Summary

Issues:
Appeal against demand of 8% value of limestone sold by manufacturers of cement - Applicability of payment requirement under Central Excise Rules - Classification of goods as limestone or waste/mineral reject.

Analysis:
The Appellate Tribunal CESTAT, CHENNAI addressed an appeal where the Revenue challenged the order of the Commissioner of Central Excise (Appeals) regarding the demand of 8% of the value of limestone sold by cement manufacturers from October 1997 to March 2002. The lower appellate authority had set aside the demand and imposed a penalty, accepting the assessees' argument that the payment requirement under various Central Excise Rules was not applicable as the goods sold were not limestone but mines waste/mineral reject due to high magnesium oxide content exceeding the permissible limit set by the Indian Bureau of Mines.

The Tribunal considered the arguments presented and noted that the Revenue did not challenge the clarification provided by the Indian Bureau of Mines regarding the classification of the goods in question. It was established that the goods sold were waste or residue, not limestone, based on the Bureau's clarification and the permission granted by the Industries Department, Govt. of Tamilnadu for utilizing the goods in colored gems, lime powder, and fertilizer industries. Consequently, the Tribunal upheld the decision of the lower appellate authority, concluding that the provisions of the rules invoked by the Revenue were not applicable in this case.

In the final judgment, the Tribunal rejected the appeal filed by the Department and disposed of the cross-objection filed by the assessees as mere comments or replies to the Revenue's appeal. The decision highlighted the importance of proper classification of goods and adherence to regulatory requirements under the Central Excise Rules, ultimately emphasizing the significance of factual determinations and supporting evidence in such cases.