1995 (1) TMI 186 - AT - Central Excise

Summary

Issues Involved:
1. Exigibility and classification of recovered DMT in molten form.
2. Marketability of recovered DMT.
3. Burden of proof regarding marketability.
4. Validity of expert opinions.
5. Procedural aspects concerning classification lists and orders.

Detailed Analysis:

1. Exigibility and Classification of Recovered DMT in Molten Form:
The primary issue was whether the recovered DMT in molten form is exigible and classifiable under Chapter sub-heading 2917.10 CET, 1985. The lower authorities classified the product under this heading, treating it as excisable goods. The appellants argued that recovered DMT is not excisable as it is not marketable and lacks shelf life. They contended that the process of recovering DMT from waste does not constitute manufacturing under Section 2(f) of the Central Excises & Salt Act, 1944. The lower authorities, however, did not differentiate between recovered DMT and virgin DMT, asserting that both have the same characteristics and end-use.

2. Marketability of Recovered DMT:
The appellants argued that the recovered DMT in molten form is not marketable because it cannot be bought and sold due to its high temperature (250^0C) and lack of shelf life. They supported their claim with a certificate from Dr. (Ms) P. Bajaj, Professor at IIT Delhi, stating that the molten DMT is not marketed in India. The lower authorities, however, presumed marketability based on the product's use as a raw material for further production. The Tribunal emphasized that marketability requires goods to be capable of being bought and sold, not merely mentioned in the Tariff Schedule. The Supreme Court's ruling in Bhor Industries' case was cited, which states that mere mention in the Tariff Schedule does not make a product goods; the real test is marketability.

3. Burden of Proof Regarding Marketability:
The Tribunal found that the department had not discharged the burden of proving the marketability of recovered DMT. The department relied on the appellants' admission of the product being goods and their filing of the classification list. However, the Tribunal noted that the department did not provide cogent evidence to counter the appellants' claim of non-marketability. The Tribunal highlighted the Supreme Court's ruling that the burden of proof of marketability lies with the department.

4. Validity of Expert Opinions:
The Tribunal scrutinized the expert opinions provided by the appellants, particularly the certificate from IIT Delhi. The Vice President questioned the basis and methodology of the expert opinions, noting that they lacked detailed parameters, authority references, and clarity on whether the factory was visited or tests conducted. The Tribunal found these testimonials of limited value and not conclusive proof by themselves. The Vice President emphasized the need for more substantial evidence, such as test reports, technical literature, or market enquiry reports, to support the appellants' claims.

5. Procedural Aspects Concerning Classification Lists and Orders:
The Tribunal examined the procedural aspects related to the filing and approval of classification lists. It was unclear whether the original order resulted from a classification list filed under protest or an already approved list. The Vice President noted that once a classification list is approved, it cannot be reopened without proper legal grounds. The Tribunal observed that both the Assistant Collector and the Collector (Appeals) failed to consider these procedural aspects adequately. Consequently, the Tribunal found it necessary to set aside the impugned orders and remand the matter for reconsideration by the Collector (Appeals).

Separate Judgments:
The Tribunal delivered separate judgments. The Judicial Member allowed the appeal, emphasizing the lack of evidence for marketability and the department's failure to discharge the burden of proof. The Vice President, however, found the material insufficient for a final verdict and highlighted procedural irregularities, leading to a remand for reconsideration. The Technical Member agreed with the Vice President, supporting the decision to remand the case for further examination by the Collector (Appeals).