2005 (6) TMI 72 - AT - Central Excise

Summary

Issues: Classification of goods under Chapter 30, Marketability of products, Suppression of facts, CENVAT credit availability, Longer period invocation

The judgment involves appeals against an OIA passed by the Commissioner of Central Excise Delhi-I. The appellants, manufacturing ayurvedic medicaments, were directed to take Central Excise registration at their factories in Dehradun and New Delhi. The dispute arose when the Commissioner classified the products under Chapter Heading 3003.39, which the appellants contested. The appellants argued that the goods were not marketable as they were semi-finished and could not be sold due to legal restrictions. They also claimed that any duty payable at the Delhi factory would be subsumed as credit at the Bangalore factory, indicating no intention to evade duty. The appellants contended that there was no suppression of facts, and therefore, the extended period could not be invoked.

The Tribunal found that the Commissioner's classification under Chapter 30 went beyond the scope of the show cause notice, rendering the OIA liable to be set aside on this ground alone. Regarding the merits, the Tribunal agreed with the appellants that the products were intermediary goods, not marketable in their current form due to legal restrictions. The Tribunal also noted that CENVAT credit would offset any duty payable at the Delhi factory, indicating no intention to evade duty. The Tribunal held that the appellants had not suppressed any facts to evade duty, and as such, the OIA could not be sustained. Referring to relevant case laws and a Board Circular, the Tribunal concluded that the goods were not excisable as they were not marketable in their current form. The Tribunal also found no justification for invoking a longer period. Consequently, the appeal was allowed with any consequential relief.

In summary, the judgment addressed the classification of goods, marketability of products, suppression of facts, availability of CENVAT credit, and the invocation of a longer period. The Tribunal set aside the OIA due to the incorrect classification under Chapter 30 and ruled in favor of the appellants, holding that the goods were not excisable as they were not marketable in their current form and any duty payable would be offset by CENVAT credit.