2013 (1) TMI 222 - AT - Central Excise

Captive consumption of sterilized/distilled water - Excise duty on the distilled/ sterilized water cleared as a combo pack called as Rabipur vaccine - Held that - Finding force in the contentions raised by assessee that the first appellate authority has not considered the Notification No.3/2005-CE, dt.24.02.2005, which exempts distilled or sterilized or conductivity water of similar purity used in the factory of production - the appellant has requested FAA to decide the matter on merit without appearance and hence this point, could not be properly considered by the first appellate authority. Thus set aside the impugned order and direct the FAA to reconsider the issue following the principles of natural justice.

Summary

Issues involved: Excise duty on distilled/sterilized water cleared as a combo pack called Rabipur vaccine.

Analysis:
1. The Tribunal found that the matter required re-consideration by the first appellate authority after hearing both sides on the Stay Petition. The Tribunal decided to waive the pre-deposit requirement and proceeded to dispose of the appeal itself.

2. The main issue in the case revolved around the Excise duty on the distilled/sterilized water cleared by the appellant as part of the Rabipur vaccine combo pack. The adjudicating authority initially ruled in favor of the appellant, stating that the product could not be identified separately. However, the first appellate authority, upon Revenue's appeal, held that the water cleared along with the vaccine should be considered captive consumption and liable for duty under Notification No.67/95-CE.

3. The Tribunal noted that the first appellate authority did not consider Notification No.3/2005-CE, which exempts water of similar purity used in the factory of production. The appellant had requested a decision on merit without appearance, which the first appellate authority did not properly address.

4. Without expressing a view on the case's merits, the Tribunal set aside the impugned order and directed the first appellate authority to re-examine the issue following the principles of natural justice. The appellants were granted the opportunity to present evidence in support of their case.

5. Ultimately, the appeal was allowed by way of remand, indicating a need for further review and consideration by the first appellate authority to ensure a fair and thorough assessment of the case.