1998 (3) TMI 280 - AT - Central Excise

Summary

Issues: Classification of product for excisability based on marketability and chemical composition.

Analysis:
1. The appeals were filed against the orders of the Additional Collector of Central Excise and the Collector (A) in Ahmedabad. The central issue in both cases was the classification of the product under reference for excisability, specifically regarding whether it was a glue or a coating solution as per relevant Board circulars.

2. The Department argued that the product in question, "Cepol D.V. (Special)" and "Movicoll T," were confirmed as glue by the Assistant Chemical Examiner and should be classified as such under the Central Excise Tariff Act. The Collector, however, contended that the product was not marketable, citing judgments related to marketability and excisability of products consumed by the manufacturer themselves but not sold in the market.

3. The Department further supported its position by referring to specific judgments such as Delhi Cloth and General Mills Co. Ltd. and M/s. Singareni Colleries Co. Ltd. to establish the excisability of the goods in question. Additionally, the Department argued against the Collector's stance on marketability based on the limited shelf life of the product, citing a Tribunal decision in the matter of M/s. Formica India Division.

4. The Counsel for the Department contended that the product was not excisable due to its short shelf life, unstable nature, and lack of marketability. The Department emphasized that the Revenue had not refuted the findings of the adjudicating authority and the appellate Collector regarding the marketability of the product.

5. The Tribunal, after considering all submissions, upheld the Chemical Examiner's report indicating the product's instability, short shelf life, and lack of marketability. The Tribunal highlighted the importance of manufacturing and marketability as essential tests for excisability, following the precedent set by the Supreme Court. As the Department failed to demonstrate the marketability of the product, the appeals were rejected in favor of the respondents.

6. In conclusion, the Tribunal upheld the impugned orders based on the established principles of manufacturing and marketability as essential criteria for excisability, as per the Supreme Court's directives. The Department's failure to prove the marketability of the product led to the rejection of their appeals in both cases.