1996 (2) TMI 225 - AT - Central Excise

Summary

Issues:
1. Whether ethyl alcohol is leviable to Central Excise Duty under Tariff Item 22.04 of Central Excise Tariff Act.

Detailed Analysis:

Issue 1: Whether ethyl alcohol is leviable to Central Excise Duty under Tariff Item 22.04 of Central Excise Tariff Act.
The appellants argued that their product, rectified spirit, consisting of 94-95% alcohol and the rest water, is not suitable for use as fuel and hence not subject to duty under Tariff Item 22.04. They relied on a previous Tribunal decision in a similar case. The Department reiterated its stance from a previous order. The Tribunal, based on various cases and definitions, clarified that "suitable for use" means practically and commercially fit for a specific purpose, not just possible or incidental use. They referenced legal interpretations to support this definition. The Tribunal also emphasized that the potential or capability for future use is not decisive; marketability would determine duty liability. They agreed with the proposition that changes in technology or laws could alter the product's marketability. Citing a previous case, the Tribunal concluded that ethyl alcohol, in the present circumstances, is not subject to duty under Tariff Item 22.04. Therefore, they set aside the impugned orders and allowed both appeals.

This judgment clarifies the interpretation of "suitable for use" under Tariff Item 22.04 and emphasizes the practical and commercial fitness for a specific purpose to determine duty liability. It also highlights the role of marketability in assessing excisability and acknowledges the potential for changes in technology or laws affecting a product's duty status.