1998 (4) TMI 266 - AT - Central Excise

Melted iron - Not marketable and hence not excisable - Splash plates is exempted product vide Notification No. 175/88-C.E.

Summary

Issues:
1. Whether melted iron obtained at a high temperature can be considered excisable and dutiable.
2. Whether pig iron and forging of non-alloyed steel used for manufacturing machinery parts qualify for exemption under Notification No. 281/86-C.E.
3. Whether the benefit of Notification No. 217/86-C.E. applies to inputs used in the manufacture of splash plates.

Issue 1:
The first issue revolves around determining the excisability of melted iron obtained at a high temperature of 1300oC. The appellant contested the marketability of melted iron, arguing it was not subject to duty. The appellate authority, relying on the absence of evidence of marketability, upheld the appellant's stance. The department failed to prove marketability, shifting the onus onto them. The tribunal concurred with the appellate authority, emphasizing the necessity of proving marketability for levying duty. Consequently, the tribunal dismissed the revenue's appeal, affirming the appellate authority's decision.

Issue 2:
The second issue concerns whether pig iron and non-alloyed steel forgings used in manufacturing machinery parts are eligible for exemption under Notification No. 281/86-C.E. The appellant argued that pig iron, as an intermediate product, did not qualify for the exemption. Conversely, the respondent contended that pig iron, along with forgings, used in machinery parts for repair and maintenance, should be exempt. Relying on a precedent where forgings received the exemption, the tribunal extended the benefit to pig iron as well. The tribunal emphasized that the notification applied to all excisable goods used within a factory, not solely the final product. Consequently, the tribunal upheld the appellate authority's decision, rejecting the revenue's appeal on this issue.

Issue 3:
The final issue pertains to whether the inputs used in manufacturing splash plates are eligible for exemption under Notification No. 217/86-C.E. The adjudicating authority initially denied this benefit based on the exemption of splash plates under a specific notification. The tribunal concurred, noting that the exemption under Notification No. 217/86 did not apply due to the exempt status of the final product, splash plates. Therefore, the tribunal set aside the appellate authority's decision on this matter and reinstated the order of the Assistant Commissioner, disposing of the appeal accordingly.

In summary, the Appellate Tribunal CEGAT, CALCUTTA addressed three key issues in this judgment. Firstly, it ruled on the excisability of melted iron obtained at a high temperature, emphasizing the necessity of proving marketability for levying duty. Secondly, the tribunal considered the eligibility of pig iron and non-alloyed steel forgings for exemption under Notification No. 281/86-C.E., extending the benefit to these intermediate products used in machinery parts. Lastly, the tribunal clarified that the inputs used in manufacturing exempted splash plates were not eligible for exemption under Notification No. 217/86-C.E. The judgment provides detailed analysis and interpretation of relevant legal provisions and precedents to resolve each issue effectively.