1997 (7) TMI 398 - AT - Central Excise

Issues Involved:
1. Classification of the product "Alusil"
2. Marketability and excisability of the product
3. Invocation of the longer period of limitation
4. Suppression of facts by the appellants

Issue-wise Detailed Analysis:

1. Classification of the Product "Alusil":
The primary issue in the appeal is the classification of the product "Alusil." Initially, the product was classified under Tariff Heading 34.04 in the show cause notice. However, during the proceedings, both parties agreed that the product could not be classified under this heading. The Collector classified the product under Tariff Heading 34.03. The appellants argued that the product should be classified under Tariff Heading 38.09. The competing tariff headings were analyzed as follows:

- Tariff Heading 34.03: Covers lubricating preparations used in various manufacturing processes to reduce friction.
- Tariff Heading 38.09: Encompasses finishing agents and other products used in the textile industry to impart specific characteristics to the materials.

The Tribunal observed that the preparations under 34.03 are used to facilitate manufacturing processes by reducing friction without imparting specific characteristics to the material. In contrast, the product "Alusil" is used in the final process of thread manufacture to impart a specific finish, reducing friction during sewing. Thus, the product imparts a characteristic to the thread, making it a finishing agent rather than a lubricating preparation. Consequently, the Tribunal concluded that the product is rightly classified under Tariff Heading 38.09.

2. Marketability and Excisability of the Product:
The appellants contended that the product "Alusil" has a limited shelf life of 10 days and is manufactured for captive use, thus not marketable. They argued that the burden of proving marketability lies with the department. The department countered that the product is capable of being taken outside the factory and has a shelf life of 10 days, making it marketable. Additionally, evidence showed that similar products were available in the market.

The Tribunal considered the evidence and concluded that the product is marketable and, therefore, excisable. The Tribunal noted that the product's limited shelf life does not preclude its marketability, as similar products were available in the market.

3. Invocation of the Longer Period of Limitation:
The appellants argued that the longer period of limitation could not be invoked as they had declared their product as liquified wax in the classification list. The department contended that the appellants had not provided sufficient information about the product's nature and use, constituting suppression of facts.

The Tribunal did not address this issue in detail, as the appellants did not press this plea after the classification issue was resolved in their favor.

4. Suppression of Facts by the Appellants:
The department argued that the appellants suppressed facts by describing their product as liquified wax instead of its actual name, "Alusil." The appellants countered that they described the product as liquified wax to make the authorities aware of its nature, as the term "Alusil" would not indicate anything specific.

The Tribunal did not delve into this issue further, as the appellants did not pursue this plea after the classification issue was resolved.

Conclusion:
The Tribunal concluded that the product "Alusil" is rightly classified under Tariff Heading 38.09, as it imparts specific characteristics to the thread, making it a finishing agent. The product is marketable and excisable despite its limited shelf life. The Tribunal did not address the issues of the longer period of limitation and suppression of facts in detail, as the appellants did not press these pleas after the classification issue was resolved in their favor.

← Previous Next →