1997 (8) TMI 267 - AT - Central Excise

Summary

Issues: Classification of burnt pot lining scrap under Tariff Heading 2804.90, Excisability of the product, Time-barred appeal

In this case, the main issue revolves around the classification of burnt pot lining scrap under Tariff Heading 2804.90. The appellants initially claimed the product as a waste product not excisable, sent to their sister plant for recovery of cryolite. The Collector of Central Excise disagreed, stating that the product was a mixture of various substances settling at the bottom of the pot during the alumina melting process, classifying it under Tariff Heading 2804.90. The Assistant Collector and the Collector (Appeals) upheld this classification, leading to the appeal before the Tribunal.

The second issue concerns the excisability of the burnt pot lining scrap. The appellants argued that the product, being a mixture of various substances and considered rubbish with no marketable value, should not be excisable. They relied on a Supreme Court judgment emphasizing the unmarketability of the product and contended that the burden of proof lay with the Revenue to establish its marketability. The Revenue, however, argued that the product had a different use as raw material for cryolite recovery, making it excisable. The Tribunal analyzed the evidence and concluded that the product, despite having some sale value, was not marketable and therefore not excisable, ruling in favor of the appellants.

Lastly, the issue of the time-barred appeal was raised concerning a consequential demand confirmed by the Assistant Collector following the Collector (Appeals) order. The appellants argued that the demand was beyond the permissible time limit, as the show cause notice was issued after the prescribed period. The Tribunal considered this argument and agreed that the demand was time-barred, allowing relief to the appellants on this ground as well.

In conclusion, the Tribunal held that the burnt pot lining scrap was not excisable under Tariff Heading 2804.90, emphasizing its unmarketability despite having some sale value. The Tribunal allowed both appeals in favor of the appellants, providing consequential relief and acknowledging the time-barred nature of the demand in the second appeal.