2008 (4) TMI 315 - AT - Central Excise

Excisablity - In this appeal, the Revenue is contesting the decision of the Commissioner (Appeals) wherein he held that two chemical solutions prepared by the respondents are not marketable and therefore, not excisable. The two chemical solutions are used for impregnating papers and cotton fabrics which are in turn used for manufacture of final product, namely, paper based laminated decorative board, insulating board or industrial board. - What the Commissioner (Appeals) has done is to say that the department has not adduced an evidence to show that the goods are marketable. - We find that there is nothing wrong in the decision taken by the Commissioner (Appeals)

Summary

Issues:
1. Whether two chemical solutions prepared by the respondents are marketable and excisable.
2. Admissibility of credit for synthetic resins used for captive consumption.

Analysis:
Issue 1: The appeal concerns the contestation by the Revenue against the decision of the Commissioner (Appeals) regarding the marketability and excisability of two chemical solutions prepared by the respondents. These solutions, utilized for impregnating papers and cotton fabrics to manufacture final products like laminated decorative boards, insulating boards, or industrial boards, were deemed non-marketable by the Commissioner (Appeals). The Revenue argued that the solutions are listed in the Central Excise Tariff, commercially available, and can have their shelf life extended with preservatives. The Commissioner (Appeals) was criticized for overstepping the appeal's scope by ruling on the excisability of impregnated cotton fabrics instead of addressing the issue of credit utilization.

Issue 2: The original adjudicating authority had previously denied credit to the assessee, considering the synthetic resins as fully manufactured goods subject to duty payment. However, the Commissioner (Appeals) determined that credit is permissible if the synthetic resins for captive consumption are not excisable. The denial of credit was primarily due to the belief that the chemical solutions were fully manufactured and excisable items, leading to inadmissible credit. The Commissioner (Appeals) emphasized the necessity of demonstrating marketability for the completion of manufacture, referencing the Bhor Industries Ltd. case. The core issue was the availability and correct utilization of credit, with a focus on the excisability of intermediate goods. Ultimately, the Tribunal upheld the Commissioner (Appeals)' decision, finding no fault in his assessment and rejecting the appeal.

This judgment, delivered by the Appellate Tribunal CESTAT, Ahmedabad, on 28-4-2008, underscores the importance of establishing marketability for excisability considerations and the admissibility of credit in cases involving intermediate goods in the manufacturing process.