2011 (4) TMI 269 - AT - Central Excise

Demand and imposing penalty - It is settled law that the quantification of duty cannot be done without the process of classification is completed - Undisputedly, the impugned order nowhere discloses that the Commissioner has applied his mind to the aspect of classification of the product before quantification of the duty - Hence, without dealing with the other aspect of the matter, the impugned order confirming the demand and imposing penalty cannot be sustained and is liable to be set aside - Accordingly, leaving all the issues open , the impugned order is hereby set aside on the said ground and the matter is remanded to the Commissioner to decide the same afresh in accordance with the provisions of law - Decided in favour of assessee.

Summary

Issues:
Classification of Anthracine Oil for duty payment.

Analysis:
The judgment pertains to an appeal arising from an order passed by the Commissioner confirming the demand of duty on Anthracine Oil. The Commissioner held that Anthracine Oil, a new product arising from cenvated inputs, is subject to duty as it fulfills the requirements of a manufactured excisable good. The Commissioner found that duty on Anthracine Oil was not barred by time limitation as it was not part of a previous adjudication order and was not known to the Department. The total duty involved on Anthracine Oil for the period December 2004 to October 2009 was quantified.

However, the appellate tribunal noted that the impugned order did not reveal any consideration given to the classification of the product before quantifying the duty. It emphasized that the process of classification must be completed before duty quantification. Therefore, the tribunal set aside the impugned order on this ground alone, without delving into other aspects of the case. The tribunal remanded the matter back to the Commissioner for a fresh decision in accordance with the law, leaving all issues open for reconsideration.

In conclusion, the appellate tribunal found that the impugned order confirming the duty demand and imposing penalties could not be sustained due to the lack of consideration given to the classification of Anthracine Oil before quantifying the duty. The tribunal's decision to set aside the order and remand the matter for fresh consideration emphasizes the importance of proper classification procedures in determining duty liabilities.