1993 (3) TMI 222 - AT - Central Excise

Summary

Issues:
Excisability of mixtures used in the manufacture of polyester staple fibre.

Detailed Analysis:

1. Excisability of Mixtures:
The main issue in this appeal was the excisability of mixtures used by the appellants in the manufacture of polyester staple fibre. The mixtures consisted of titanium dioxide, antimony trioxide, and calcium acetate, which were used as a delustering agent and catalysts. The Department classified these mixtures as excisable goods known as catalyst slurry under Heading 3801.90 of the Central Excise Tariff from 1-3-1986 to 28-2-1987 and subsequently under Heading 3815.00. On the other hand, the appellants argued that these mixtures were not "goods" as they had a short shelf life and were not marketable.

2. Adjudication and Appeal:
The adjudicating authority initially held that the mixtures were chargeable to duty under Heading 3801.90 until 28-2-1987 and later under Heading 3815.00, confirming a demand of Rs. 1,40,785.35. This decision was upheld by the lower appellate authority, leading to the current appeal before the Appellate Tribunal CEGAT, New Delhi.

3. Precedent and Tribunal's Order:
During the hearing, the appellants' counsel referenced a previous order by the Tribunal in the case of M/s. Petrofils Co-operative Ltd. v. Collector of Central Excise, Vadodara. The Tribunal's order in that case concluded that similar mixtures used in the manufacture of polyester chips were not excisable or dutiable under the Central Excise Tariff Act, 1987. The Tribunal noted that the mixtures were essential for the manufacturing process, tailor-made for specific needs, had a short shelf life, and were not marketable. The Tribunal emphasized that the burden of proving marketability rested with the Department, and in the absence of evidence supporting marketability, the mixtures were not excisable.

4. Decision and Relief:
In line with the precedent set in the earlier case, the Appellate Tribunal, comprising Ms. Jyoti Balasundaram and Shri P.K. Kapoor, allowed the current appeal. The Tribunal set aside the impugned order, ruling in favor of the appellants. The decision granted consequential relief, if any, due to the appellants based on the non-excisability of the mixtures used in the manufacturing process of polyester staple fibre.

In conclusion, the Appellate Tribunal's decision was based on the principle that the mixtures used by the appellants, essential for their manufacturing process and not marketable due to their short shelf life, were not excisable goods under the Central Excise Tariff Act. The Tribunal's ruling was consistent with the precedent established in a similar case, providing relief to the appellants in this appeal.