1995 (4) TMI 72 - SC - Central Excise

Summary

Issues: Classification of goods under Tariff Items 26B(1) and 26B(2a) for excise duty assessment.

The judgment revolves around the classification of goods described as calots and pellets of zinc under Tariff Items 26B(1) and 26B(2a) for excise duty assessment. The Assistant Collector of Central Excise initially classified the goods together, but the Collector of Central Excise (Appeals) disagreed, stating that they were distinct and the initial decision lacked reasoning. The Collector held that the pellets could not be classified as calots under Tariff Item 26B(2a). The Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) was approached by the department, arguing that calots were a separate item attracting duty under Tariff Item 26B(2a). The Tribunal concluded that the goods were calots, disputing the previous findings.

The appellant contended that the goods were neither calots nor pellets but intermediate products for captive consumption only, not marketable or taxable under Tariff Item 26B(1) or 26B(2a. The Tribunal agreed, stating that the goods were not liable for excise duty under Tariff Item 26B(2a) and were used solely for captive consumption, not for commercial purposes.

The appellant had been paying excise duty under protest on the intermediate product under Tariff Item 26B(1), arguing that it did not fall under the description of pellets or calots and was not taxable. The Tribunal, without considering the dictionary meaning of calots or commercial recognition of the product, classified it as calots and imposed excise duty under Tariff Item 26B(2a). However, the court found that the Tribunal erred in this classification, as there was no evidence to support that the intermediate product met the description of calots, thus ruling in favor of the appellant.

Consequently, the court allowed the appeal, set aside the Tribunal's order, and held that the intermediate product did not fall under Tariff Item 26B(2a) for excise duty assessment. The decision was made without delving into other aspects of the case, with no costs imposed on either party.