2015 (10) TMI 2267 - AT - Central Excise

Duty demand - Classification of good - Classification under Heading 2710.90 or under Heading 2710.13 - Captive consumption - Held that - Both the Revenue as also the assessee in their grounds of appeal have urged that the Commissioner (Appeals) should have decided himself instead of remanding the matter. Revenue s contention is that the main terms of remand is to get the goods retested, but the goods are not being manufactured any more and, therefore, neither the sample can be drawn nor the goods can be retested. On the other hand, the assessee feels that based upon the available information, the matter is in their favour. Keeping in view the fact that the samples of the goods are not available and it is not possible to retest the goods but the only solution left is to decide the case based upon whatever evidences are available on record. Since the Commissioner (Appeals) has not examined all the evidences particularly the test reports of the assessee themselves, statements made by various personnel of the assessee and other related evidences, we consider it appropriate that we set aside the order of the Commissioner (Appeals) and remand the matter to the Commissioner (Appeals) to re-adjudicate the matter based upon the evidences already available and which form part of the show cause notice. - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Classification of goods under Heading 2710.13 or 2710.90, Remand by Commissioner (Appeals), Burden of proof on Revenue, Availability of evidences for classification, Invocation of extended period of limitation

Classification of Goods:
The case involved the classification of two items, Iso Pentane and Heptane, under Heading 2710.90 or 2710.13. The Revenue contended that both items should be classified under Heading 2710.13, while the assessee argued for classification under Heading 2710.90. The Deputy Chief Chemist confirmed the flash point of Iso Pentane below 25^0C but did not test its suitability as fuel. The Revenue failed to satisfy the second criterion for classification under Heading 2710.13. The Tribunal analyzed the relevant headings and directed the Commissioner (Appeals) to re-adjudicate based on available evidence.

Remand by Commissioner (Appeals):
The Commissioner (Appeals) remanded the case back to the lower authority for retesting the goods, which the Revenue argued was unnecessary as the items were no longer manufactured. The assessee contended that the Commissioner (Appeals) should have decided based on existing evidence. The Tribunal set aside the order and remanded the matter to the Commissioner (Appeals) to re-adjudicate based on the available evidence and examine the invocation of the extended period of limitation.

Burden of Proof on Revenue:
The assessee argued that the burden of classifying goods under a particular heading lies with the Revenue, which they failed to discharge. The Revenue presented substantial evidence from statements, test reports, and process descriptions to support classification under Heading 2710.13. The Tribunal noted that the Commissioner (Appeals) did not examine all evidence and directed a re-adjudication based on the available records.

Availability of Evidences for Classification:
Both parties raised concerns about the availability of evidence for classification. The Revenue believed there were enough evidences in the show cause notice to determine classification, while the assessee insisted that the available information favored their case. The Tribunal emphasized examining all available evidence before reaching a decision.

Invocation of Extended Period of Limitation:
The assessee disputed the invocation of the extended period of limitation, claiming they regularly filed classification declarations without objection from the Revenue. The Commissioner (Appeals) did not provide a finding on this issue. The Tribunal directed the Commissioner (Appeals) to address the matter of invoking the extended period as well.

In conclusion, the Tribunal allowed all appeals by remanding the case to the Commissioner (Appeals) for re-adjudication based on existing evidence, keeping all issues open for further arguments on merits, limitation, or other legal points.