2012 (9) TMI 275 - AT - Central Excise

Non payment of excise duty - manufacture of fire bricks grog - Held that - As per OIO grog has been equated with refractory bricks stating that the same has been obtained after further processing like cutting to specific sizes whereas in the SCN allegation was that the grog was refractory bricks broken into pieces on certain specified sizes through grinding of refractory bricks thus finding force that the impugned order-in-original has traveled beyond the scope of the SCN on this score. As in the process of grinding and breaking, refractory bricks cannot retain its shaping and hence be excluded from the purview of Ch.69 by virtue of the restriction clause of Ch.Note 2 of Ch.69 - as concluded from the records the goods are sold in gunny bags in loose condition held Waste and scrap of fire bricks to be non-excisable/dutiable following the ratio of law laid in Birla Corporation Vs. Central Excise, Raipur 2002 (11) TMI 239 - CEGAT, COURT NO. IV, NEW DELHI -- in favour of assessee.

Summary

Issues: Classification of fire bricks grog under Chapter 6901.00 of CETA, 1985 as refractory bricks.

Analysis:
The case involved a dispute regarding the classification of fire bricks grog by the Department under Chapter 6901.00 of CETA, 1985 as refractory bricks. The Department initiated proceedings against the respondent, claiming that fire bricks grog should be classified as refractory bricks. The ld. Adjudicating Authority upheld this classification, leading the respondent to appeal to the ld. Commissioner (Appeals), who ruled in favor of the respondent, stating that fire bricks grog are not excisable. The Revenue then filed an appeal challenging this decision.

The Revenue contended that refractory grogs, obtained after cutting refractory bricks into specific sizes, should be classified under SH No.6901.00 of CETA, 1985, as they retain the properties of refractory ceramic products even after being reduced to grog form. The Revenue argued that Chapter Note 2 of Chapter 69 does not exclude refractory grogs from being classified as refractory bricks.

Upon careful consideration of the submissions and records, the Tribunal found that the impugned order-in-original incorrectly equated grog with refractory bricks, as grog was obtained by grinding and breaking refractory bricks into specified sizes, which altered their original shape. The Tribunal cited precedents, such as the case of Waste and scrap of fire bricks being non-excisable, to support its decision. Additionally, the Tribunal noted that the goods were sold in gunny bags in loose condition, further supporting the classification of fire bricks grog as non-excisable.

In conclusion, the Tribunal upheld the findings of the ld. Commissioner (Appeals), dismissing the Revenue's appeal as devoid of merit. The judgment emphasized that the grinding and breaking process altered the nature of the refractory bricks, rendering them unsuitable for classification under Chapter 6901.00 of CETA, 1985.