1990 (11) TMI 244 - AT - Central Excise

Summary

Issues:
Classification of gypsum processed into Plaster of Paris under Chapter Heading 2505 of CET, applicability of Notification No. 271/86, benefit under Notification No. 217/86, invocation of extended period under Section 11A of Central Excises and Salt Act, 1944.

Analysis:
The appellants contested the Additional Collector's order classifying gypsum processed into Plaster of Paris as excisable under Chapter Heading 2505 of CET, liable for duty under Section 11A of the Central Excises and Salt Act, 1944. The appellants argued that the process of obtaining Plaster of Paris through mechanical processes of crushing, grinding, and calcination does not qualify as manufacturing, citing Chapter Note 1 of Chapter 25 which excludes products obtained by roasting or calcination from Heading No. 2505. They also claimed exemption under Notification No. 217/86 for inputs used in the manufacture of final products. The appellants further challenged the invocation of the extended period under Section 11A, asserting that the Department was aware of the manufacturing process, negating any suppression or fraud.

The Tribunal examined the process of obtaining Plaster of Paris from gypsum, highlighting the mechanical steps involved such as washing, drying, crushing, grinding, roasting, and calcination. The appellants argued that since the product is captively consumed in the manufacture of sanitary wares, it should not be classified under Chapter Heading 2505. The Tribunal referred to Chapter Note 2 of Chapter 25, which excludes products obtained by roasting or calcination from the scope of Heading No. 2505. The Tribunal concurred with the appellants, ruling that the Plaster of Paris, obtained through roasting and calcination, falls outside the purview of Chapter 25.05, as per Note 2, and cannot be classified under the said heading. Consequently, the Tribunal held that the impugned product is not excisable and not covered by Chapter 25 of CET, leading to the appellants' success in the appeal with any consequential relief.

In conclusion, the Tribunal set aside the Additional Collector's order, ruling in favor of the appellants regarding the classification of gypsum processed into Plaster of Paris, exemption under Notification No. 217/86, and the invocation of the extended period under Section 11A of the Central Excises and Salt Act, 1944. The Tribunal emphasized the exclusion of products obtained by roasting or calcination from Chapter Heading 2505, as per Chapter Note 2, to support its decision that the impugned product does not fall under the excisable category.