2002 (10) TMI 145 - AT - Central Excise

Summary

Issues involved:
1. Excisability of waste high boiler
2. Time-barred demand for duty
3. Marketability of waste high boiler
4. Applicability of extended period for demand
5. Penalty under Rule 173Q of the Central Excise Rules and Section 11AC of the Central Excise Act

Excisability of waste high boiler:
The appellants contended that waste high boiler, a byproduct generated in a reactor during a chemical reaction, is not a marketable commodity and should not be considered excisable goods. They cited the decision of the Hon'ble Supreme Court in a similar case to support their argument. However, the revenue argued that waste high boiler is an organic compound, not merely waste, and falls under the category of residual products of the chemical industry. The tribunal noted that the chemical test report confirmed it to be an organic compound, which is specifically covered under the Central Excise Tariff. Therefore, the tribunal ruled that waste high boiler is excisable.

Time-barred demand for duty:
The appellants claimed that the demand for duty was time-barred as the show cause notice was issued after a significant delay from the alleged period of non-payment. They argued that the revenue was aware of their activities based on a past letter. However, the tribunal found that the appellants failed to provide concrete evidence to prove that the revenue was informed about the clearance of waste high boiler. Citing a Supreme Court decision, the tribunal held that if a product is removed without informing the revenue department, it implies an intention to evade duty payment. Consequently, the tribunal rejected the argument of the demand being time-barred.

Marketability of waste high boiler:
Although the appellants claimed that waste high boiler was not marketable, the tribunal noted that during the relevant period, the appellants sold waste high boiler for a substantial amount. Considering it as a residual product of the chemical industry, the tribunal concluded that waste high boiler is a marketable commodity and falls under the Central Excise Tariff, affirming the original order on marketability and excisability.

Applicability of extended period for demand:
The tribunal dismissed the appellants' argument against the applicability of the extended period for the demand, emphasizing that the lack of communication to the revenue department regarding the clearance of waste high boiler indicated an intent to evade duty payment. Citing a Supreme Court decision, the tribunal upheld the invocation of the extended period for demand in this case.

Penalty under Rule 173Q and Section 11AC:
The tribunal observed discrepancies in the penalty imposed under Rule 173Q of the Central Excise Rules and Section 11AC of the Central Excise Act. While the penalty under Rule 173Q was enhanced by the Commissioner (Appeals), the revenue did not appeal against the initial penalty imposed. Consequently, the tribunal set aside the enhanced penalty under Rule 173Q, reducing it to the originally imposed amount of Rs. 15,000. The tribunal upheld the penalty under Section 11AC as per the impugned order, disposing of the appeal accordingly.