1996 (12) TMI 160 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 44/82 regarding exemption eligibility for captively consumed goods.
2. Determination of duty liability on captively consumed synthetic organic dyes.
3. Marketability requirement for excise duty under Tariff Item 14D.

Analysis:
The appeal challenged an Order-in-Appeal confirming a demand for duty on synthetic organic dyes captively consumed for manufacturing other dyes. The appellants contested the demand based on Notification No. 44/82 exemption and marketability of the goods. The Assistant Collector held that captively consumed goods are subject to duty regardless of marketability. The appellants argued that the goods were not fully manufactured and not marketable in their intermediate form. They relied on a Supreme Court judgment emphasizing marketability for excise duty. The Department reiterated the lower authorities' findings.

The Tribunal analyzed whether the captively consumed synthetic organic dyes were fully manufactured goods liable for duty under Tariff Item 14D. The appellants argued that the goods were not fully manufactured or marketable in their intermediate form. They referenced a Trade Notice and Supreme Court decisions emphasizing marketability for excise duty. The Tribunal found no evidence of marketability in the record and agreed with the appellants that mere satisfaction of Tariff Item 14D did not establish duty liability. The Tribunal also noted the inadvertent inclusion of captively consumed goods in clearances, supporting the appellants' position.

Ultimately, the Tribunal allowed the appeal, setting aside the Order-in-Appeal and granting consequential reliefs to the appellants. The decision hinged on the lack of evidence of marketability for the captively consumed goods, emphasizing that mere compliance with Tariff Item 14D did not automatically trigger duty liability. The Tribunal's decision aligned with the appellants' arguments regarding the interpretation of Notification No. 44/82 and the marketability requirement for excise duty under Tariff Item 14D.