1989 (5) TMI 206 - AT - Central Excise

Summary

Issues:
1. Whether the production of Blown Bitumen from Straight grade Bitumen amounts to manufacture.
2. Whether Blown Bitumen can be classified as an excisable good under the tariff.

Analysis:
1. The appeal challenged an order demanding central excise duty on goods cleared by the appellants during a specific period. The dispute arose because the department found the appellants ineligible for an exemption under Notification 77/83 due to exceeding the aggregate value of clearances of excisable goods. The Assistant Collector upheld the duty demand, considering Blown Bitumen as a new excisable product under Item 11 of the Central Excise Tariff, leading to the appeal.

2. The appellants argued that Blown Bitumen, produced from Straight grade Bitumen, should not attract duty as both fall under the generic term "Bitumen" in the tariff. They cited case law supporting the interpretation that a general term covers all forms and varieties of a commodity. They contended that Blown Bitumen is not dutiable and highlighted a prior decision by the Appellate Collector supporting their stance.

3. The department, relying on a Supreme Court decision, argued that Blown Bitumen is a distinct product from Straight grade Bitumen, attracting duty. They referenced a Tribunal judgment emphasizing that a new excisable commodity, even under the same tariff item, is liable for duty. The department disagreed with the appellants' interpretation and supported the Assistant Collector's view on the dutiability of Blown Bitumen.

4. The Tribunal analyzed the production process of Bitumen, noting that blowing Bitumen alters its characteristics, making it suitable for different uses like roofing material. The Tribunal concluded that manufacturing Blown Bitumen from Straight grade Bitumen involves a process that transforms it into a distinct commodity. Citing the Supreme Court's precedent and the Tribunal's decision in a similar case, the Tribunal upheld the duty demand, considering Blown Bitumen as an excisable good under Item 11 of the Central Excise Tariff. The Tribunal rejected the appeal, affirming the Collector's decision based on the aggregate valuation of clearances exceeding the threshold for exemption.

This comprehensive analysis highlights the key legal arguments, interpretations of relevant case law, and the Tribunal's reasoning leading to the decision to reject the appeal and uphold the duty demand on Blown Bitumen produced by the appellants.