2000 (7) TMI 129 - AT - Central Excise

Summary

Issues:
1. Duty demand on moulding powder used in manufacturing exempted final products.
2. Duty demand on various products including Rockers, Slides, Chairs, Swings, Desks, Play Tables, and Play Pools.
3. Eligibility of MODVAT credit for inputs used in manufacturing moulding powder.
4. Invoking longer period under proviso to Section 11A due to suppression of facts.
5. Classification of products based on commercial parlance test.
6. Interpretation of "Toys" and "Games" in the context of commercial parlance.
7. Determination of actual use and classification of Play Pool as a bath tub or a plaything.
8. Re-determination of demands, penalty, and interest liabilities.

Analysis:

1. The Commissioner found that the conversion of granules into powder for manufacturing exempted final products constitutes "manufacture" as per Chapter Note 6 (b) of Chapter 39. The duty demand was confirmed, and a penalty was imposed. The appeal challenged this order.

2. Another Show Cause Notice demanded duty on various products, classifying them under different headings with applicable duty rates. The Commissioner upheld the duty demand and penalty, which was challenged in the appeal.

3. The Tribunal found that the MODVAT credit eligibility for inputs used in manufacturing moulding powder cannot be denied based on previous legal precedents. The matter was remanded for determining the quantum of eligibility.

4. The suppression of facts regarding the production of powder justified invoking the longer period under Section 11A, as determined by the Commissioner.

5. The classification of products like Rockers, Slides, Chairs, Swings, Desks, Play Tables, and Play Pools was analyzed based on the commercial parlance test. The matter was remanded for further determination.

6. The interpretation of "Toys" and "Games" in commercial parlance was discussed, emphasizing the need for determining the understanding of these terms by persons dealing with them.

7. The classification of the Play Pool as a bath tub or a plaything was disputed based on the actual use and characteristics of the product. Further clarification was required.

8. The Tribunal set aside the impugned orders, requiring re-determination of demands, penalty, and interest liabilities based on the reworked-out demands and classification of products. The matter was remanded for de novo adjudication to address all the issues comprehensively.