1988 (2) TMI 169 - AT - Central Excise

Summary

Issues:
1. Whether duty can be demanded on sawn Paratty and saw dust cleared by the appellants.
2. Whether sawn Paratty and saw dust are excisable products.
3. Whether the products fall under exemption notifications.

Analysis:
1. The case involved a notice issued to the appellants regarding the demand for duty on sawn Paratty and saw dust cleared by them. The Collector of Central Excise adjudicated the matter and held duty payable for a limited period without imposing a penalty. The appeal was transferred to the Tribunal for consideration.

2. The Tribunal had to determine whether sawn Paratty and saw dust are excisable products on which duty could be demanded. The appellants argued that these products were not excisable and could be exempted under certain notifications. The Tribunal considered previous judgments on similar products to assess their excisability.

3. The Tribunal noted that sawn Paratty and saw dust emerged during the process of sawing logs and were partly used by the appellants and partly sold. Previous decisions on similar products were analyzed, including cases where certain waste products were found usable for other purposes. The appellants argued that the products emerged involuntarily during the manufacturing process, citing a Delhi High Court judgment on scrap arising during tire manufacturing.

4. The Tribunal considered whether the products could be classified as by-products and, therefore, liable for duty. The department argued that the products should be considered as manufactured articles based on a Supreme Court judgment regarding soap stock. However, the Tribunal found that the Supreme Court judgment did not support this argument.

5. Ultimately, the Tribunal held that sawn Paratty and saw dust were not excisable products as they emerged involuntarily during the manufacturing process, following the Delhi High Court decision on similar scrap products. Consequently, the Tribunal allowed the appeal, setting aside the Collector's orders.

6. The Tribunal's decision rendered the consideration of exemption notifications unnecessary, given the finding that the products were not excisable. The appeal was allowed, and any consequential relief was granted to the appellants.