2012 (7) TMI 111 - AT - Central Excise

Marketability of goods - bus body parts manufactured and supplied to their divisional office Held that - The components of bus bodies are meant for specific use in buses made for repair and maintenance purposes cannot be used in other buses made by other bus body builders - no evidence from the Revenue to show that the components are bought and sold in the market as commodity BOARD OF TRUSTEES Versus COLLECTOR OF CENTRAL EXCISE, A.P. 2007 (8) TMI 350 (SC) - The essence of marketability is neither in the form nor in the shape or condition in which the manufactured articles are to be found, it is the commercial identity of the articles known to the market for being bought and sold as decided in UOI vs. Sonic Electrochem (P) Ltd 2002 (9) TMI 104 (SC) - The products, components of bus bodies made by the appellant are not available in market no point of levy of duty in favour of assessee. Scrap generated during the course of manufacture of the parts Held that - once the department itself has held the goods as non-excisable and each sale of scrap was intimated to the department by the unit, allegation of suppression of fact against the appellant does not survive.

Issues Involved:
1. Dutiability of bus body parts and scrap.
2. Marketability of the bus body components.
3. Limitation and suppression of facts by the appellant.
4. Consistency in departmental decisions regarding excisability.

Detailed Analysis:

1. Dutiability of Bus Body Parts and Scrap:
The appellants, engaged in bus body building, were issued show cause notices for not paying central excise duty on components and scrap generated during manufacturing. The adjudicating authority confirmed the duty demand and imposed penalties under Section 11AC read with Rule 173Q and Rule 25 of the Central Excise Rules. The Commissioner of Central Excise (Appeals) upheld these orders, leading to the present appeals.

2. Marketability of the Bus Body Components:
The appellants argued that the components manufactured were custom-designed for their buses and not marketable as they were not bought and sold in the market. They relied on previous adjudications where similar components were deemed non-marketable. The Commissioner (Appeals), however, contended that the components were standardized and could be supplied to other divisions, making them marketable. The Tribunal examined precedents, including *UOI vs. Sonic Electrochem (P) Ltd.* and *Board of Trustees vs. CCE, A.P.*, which emphasized that goods must be commercially known and sold in the market to be deemed marketable. The Tribunal concluded that the components were not marketable as there was no evidence of them being sold in the market.

3. Limitation and Suppression of Facts by the Appellant:
The appellants argued that the issue had been previously adjudicated in their favor in 1993, and the department had accepted the non-excisability of the components, making the current demand time-barred. The Tribunal noted that the department had accepted the earlier decision and the appellant had informed the department about the scrap sales, negating any suppression of facts. Consequently, the Tribunal found the demand to be unsustainable on the grounds of limitation.

4. Consistency in Departmental Decisions Regarding Excisability:
The Tribunal observed that the department had previously accepted the non-excisability of similar components manufactured by the appellants. The Commissioner (Appeals) had based his decision on the practice in the Pune unit, which was inconsistent with the earlier adjudications. The Tribunal held that the lack of consistency in departmental decisions could not form the basis for confirming the duty demand.

Conclusion:
The Tribunal allowed the appeals, holding that the bus body components were not marketable commodities and hence not excisable. The Tribunal emphasized the need for consistent departmental decisions and the burden on the department to prove marketability. The appeals were pronounced in favor of the appellants on 10.4.2012.

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