1994 (9) TMI 168 - AT - Central Excise

Issues Involved:
1. Marketability of the "rough rolled flat form" of zinc.
2. Classification of the product under the Central Excise Tariff.
3. Admissibility of additional evidence submitted by the Revenue.
4. Interpretation of the Supreme Court's remand order.

Issue-wise Detailed Analysis:

1. Marketability of the "rough rolled flat form" of zinc:
The Supreme Court remanded the case to the Tribunal to determine whether the rough rolled flat forms of zinc are marketable commodities. The Tribunal examined the evidence provided by both parties. The Department argued that the product is marketable based on the appellant's own admission in a letter dated 19-9-1974, wherein they referred to the product as "zinc sheets" and sought permission to get them rolled from an external rolling mill. The Department also submitted an affidavit from the Assistant Collector of Central Excise, which indicated that the product was being sold in the market.

The appellant countered with affidavits from experts like Dinshaw Sorabji and Natarajan Sreenivasan, asserting that the rough rolled flat forms are not marketable as they do not meet ISI standards and are produced for immediate consumption in the manufacture of dry cell batteries. The Tribunal, however, found that the product's limited marketability to dry cell battery manufacturers was sufficient to establish its marketability.

2. Classification of the product under the Central Excise Tariff:
The product in question was classified under Item 26B(2) of the Central Excise Tariff, which covers "zinc sheets, strips, circles, and foils in any form or size." The appellant argued that their product did not meet the specifications for zinc sheets and should not be classified under this item. However, the Tribunal noted that the tariff item includes zinc sheets "in any form or size," which is broad enough to encompass the rough rolled flat forms. The Tribunal also referred to the Supreme Court's observation that even defective or sub-standard goods could be classified under the tariff item if they fit the description.

3. Admissibility of additional evidence submitted by the Revenue:
The Tribunal had to decide whether to consider an affidavit from the Assistant Collector of Central Excise, which was submitted after the hearing in the High Court had concluded. The appellant argued that this affidavit should not be considered as it was not formally admitted into evidence by the High Court. The Tribunal agreed with this argument, stating that the affidavit could not be considered because the High Court did not pass an order allowing it to be taken on record, and the appellant was not given an opportunity to rebut it.

4. Interpretation of the Supreme Court's remand order:
The Supreme Court directed the Tribunal to determine the marketability of the product based on the evidence already on record and not to allow any new evidence. The Tribunal interpreted this to mean that it could only consider evidence that was formally admitted by the High Court. As a result, the affidavit from the Assistant Collector of Central Excise was excluded from consideration.

Judgments Delivered:
- Majority Opinion: The majority found that the rough rolled flat forms of zinc are marketable and fall under Item 26B(2) of the Central Excise Tariff. The appeal was rejected.
- Dissenting Opinion: One member disagreed, arguing that the product was not marketable as "zinc sheets" and should not be classified under Item 26B(2).

Final Order:
In terms of the majority order, it was held that:
1. Rough rolled flat forms of zinc ingots are liable to the payment of excise duty under Item 26B(2) of the erstwhile Schedule of the Central Excises & Salt Act, 1944, as "zinc sheets in any form or size."
2. The appeal was rejected.

Dated: 15-9-1994
Sd/-
(P.K. Kapoor)
Member (T)

Sd/-
(S.L. Peeran)
Member (J)

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