2017 (12) TMI 691 - AT - Central Excise

Excisability/marketibility - radioactive isotope - whether the said isotope is having any self-life, so as to become eligible for charging Central Excise duty on the same? - Held that - from the knowledge of Physics that it is known that the isotope does not have any shelf-life and the moment it comes into existence, its start decaying and reduces to half of its weight within the time which is called half-life period - the goods manufactured by the appellant do not have any shelf-life. The goods manufactured by the appellant are not chargeable to duty of Central Excise - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of radioactive isotope under Central Excise Tariff Act, 1985; Chargeability of Central Excise duty based on shelf-life of the isotope; Marketability test for levy of Central Excise duty.

Analysis:

1. Classification of radioactive isotope under Central Excise Tariff Act, 1985:
The appeal revolved around the classification of a labeled 18F-FDG compound, a radioactive isotope, under Tariff Item No.28444000 of the Central Excise Tariff Act, 1985. The appellant contested the show cause notice issued by the Revenue contending that the isotope was not chargeable to Central Excise duty. The original authority had held that the goods were indeed chargeable to duty, leading to the appeal before the Commissioner (Appeals).

2. Chargeability of Central Excise duty based on shelf-life:
The main issue in the appeal was whether the radioactive isotope, with a half-life period of 109.8 minutes, was eligible for charging Central Excise duty. The appellant argued that if the goods were not administered within the half-life period, they became unusable and unmarketable. However, the Revenue supported the Order-in-Appeal which upheld the chargeability of duty based on the shelf-life argument.

3. Marketability test for levy of Central Excise duty:
The appellant contended that due to the short half-life of the isotope, there was no open market available for the goods, thus failing the test of marketability required for the levy of Central Excise duty. The Tribunal, after considering the arguments from both sides and examining the physics of the isotope, concluded that the goods did not have any shelf-life as they start decaying immediately upon creation, leading to the decision that the goods were not chargeable to Central Excise duty.

In conclusion, the Appellate Tribunal CESTAT Allahabad, comprising Mr. Anil Choudhary and Mr. Anil G. Shakkarwar, set aside the Order-in-Appeal and allowed the appeal with consequential relief, ruling that the radioactive isotope manufactured by the appellant was not chargeable to duty under the Central Excise Tariff Act, 1985.