1994 (6) TMI 91 - AT - Income Tax

Summary

Issues:
- Whether Sulphuric Acid is an excisable good liable to duty?
- Whether the appellants are entitled to the benefit of Notification No. 217/86-C.E. for exemption from duty?

Analysis:

Issue 1:
The appeal concerns the classification of Sulphuric Acid as an excisable good liable to duty. The appellants argued that Sulphuric Acid is not marketable and therefore not subject to duty. They relied on the case of Bhor Industries Ltd. v. Collector of Central Excise, emphasizing that marketability is essential for an item to be dutiable. However, the authorities found that Sulphuric Acid, being an intermediate product in the manufacture of Oleum, is indeed marketable. They referenced the case of Plasmac Machine Manufacturing Co. Ltd. v. Collector of Central Excise to support their conclusion that marketability is determined by the capability of being sold. Consequently, the Tribunal held that Sulphuric Acid in this case qualifies as an excisable good liable to duty.

Issue 2:
Regarding the entitlement to exemption under Notification No. 217/86-C.E., the appellants contended that the benefit should not be dependent on the clearance of excisable goods. However, the Tribunal noted that the notification excludes products cleared without payment of duty. As the final product, Oleum, was cleared without duty payment to specific units, the appellants were not eligible for the exemption. The Tribunal upheld the decisions of the lower authorities in denying the benefit of the notification based on the specific conditions outlined therein. Consequently, the appeal was dismissed for lacking merit.

In conclusion, the Tribunal affirmed that Sulphuric Acid is an excisable good liable to duty and upheld the denial of exemption under Notification No. 217/86-C.E. due to the clearance of the final product without payment of central excise duty.