2018 (2) TMI 522 - AT - Central Excise

Classification of goods - Sugar syrup - intermediate goods - It appeared to Revenue that sugar syrup was classifiable under Tariff Item No. 17029090 - N/N. 67/1995-CE dated 16.03.1995 - Held that - this Tribunal in the case of Rishi Bakers Pvt. Ltd., Kanpur 2015 (4) TMI 893 - CESTAT NEW DELHI held that there was no evidence to prove that sugar syrup captively consumed is classifiable under Tariff Item No. 17029090 nor there is any evidence to prove that the goods in question in the form in which they come into existence in the appellants factory are marketable - Sugar syrup coming into existence during the manufacture of biscuits was not attracting Central Excise duty. In the present case we hold that sugar syrup coming into existence during the manufacture of biscuits and captively consumed does not attract Central Excise duty for the reason that there is no evidence that the same is marketable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Classification of sugar syrup under Tariff Item No. 17029090.
2. Applicability of Central Excise Duty on intermediate products.
3. Interpretation of Notifications No. 67/1995-CE and No. 22/2007-CE.
4. Adjudication of show cause notices.
5. Decision of learned Commissioners (Appeals).
6. Applicability of penalty in specific cases.
7. Comparison with previous Tribunal orders.
8. Marketability of sugar syrup produced during biscuit manufacturing.

Analysis:
1. The appeals revolve around the classification of sugar syrup under Tariff Item No. 17029090. The Revenue contended that sugar syrup used in biscuit manufacturing attracted Central Excise Duty. However, the Tribunal found no evidence to prove the marketability of sugar syrup, concluding that it did not attract Central Excise duty.

2. The issue of Central Excise Duty on intermediate products arose due to changes in duty exemptions post-2007. The Notification No. 67/1995-CE exempted intermediate products, but Notification No. 22/2007-CE altered the exemption criteria based on MRP. This led to demands for duty payment on sugar syrup used in biscuit production.

3. The interpretation of Notifications No. 67/1995-CE and No. 22/2007-CE played a crucial role in the case. The change in exemption criteria impacted the duty liability on intermediate products like sugar syrup, leading to disputes and show cause notices.

4. The adjudication of show cause notices resulted in Orders-in-Original confirming duty demands on sugar syrup. The appellants challenged these orders before the learned Commissioners (Appeals), leading to the subsequent Orders-in-Appeal.

5. The decisions of the learned Commissioners (Appeals) upheld the duty demands in most cases, except for one instance where the penalty was set aside for M/s M.P. Biscuits. This discrepancy led to the appeals before the Tribunal.

6. Specific cases involved the applicability of penalties, with the learned Commissioners (Appeals) differing in their decisions. The Tribunal reviewed these penalties in light of the marketability and duty liability of sugar syrup during biscuit manufacturing.

7. The comparison with previous Tribunal orders, specifically the case of M/s Bhagwati Food Pvt. Ltd., highlighted consistent findings regarding the marketability of sugar syrup and its duty liability. This precedent influenced the Tribunal's decision in the present appeals.

8. The crucial aspect of the case was the marketability of sugar syrup produced during biscuit manufacturing. The Tribunal emphasized the lack of evidence supporting its marketable nature, leading to the conclusion that it did not attract Central Excise duty. This finding influenced the favorable outcome for the appellants in all 23 appeals.