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1999 (1) TMI 124 - AT - Central Excise
Issues:
Manufacture process of Pharmaceutical product involving by-products and permissions under Central Excise Rule, 1944; Classification of product as finished or semi-finished; Allegations of duty evasion and penalty imposition; Consideration of marketability for determining dutiability of excisable goods; Aspect of limitation in invoking extended period for demand. Analysis: The judgment involves the appellant's manufacturing process of a Pharmaceutical product, Ethambutol Hydrochloride, which generates by-products like L-2 Amino Butanol Tartaric. The appellant sought permission under Rule 57F(2) to remove this by-product for recovery of Calcium tartarate. The permission was later withdrawn by the department, leading to allegations of duty evasion and penalty imposition. The Commissioner's order confirmed the demand, imposed a penalty, and ordered confiscation of the appellant's assets, prompting the appeal. The appellant argued that L-2 Amino Butanol Tartaric was a waste product fit only for recovery of Tartaric Acid, lacking industrial application or marketability. They cited Supreme Court judgments emphasizing the necessity of marketability for determining dutiability of excisable goods. The appellant also raised the aspect of limitation, contending that the department, having granted permission initially, could not later allege contravention by the assessee for the same period covered under the permission. The Tribunal scrutinized the evidence, correspondence, and the Commissioner's order. It found that the department failed to establish the by-product as a finished product capable of being marketed, thereby not proving its excisability and dutiability. The Tribunal also noted that the Commissioner erred in rejecting evidence without proper examination, similar to a Supreme Court judgment's observation in another case. Consequently, the Tribunal allowed the appeal on both merit and limitation grounds, setting aside the impugned order and providing consequential relief as per law.
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