1999 (8) TMI 223 - AT - Central Excise

Summary

Issues:
1. Benefit of Notification No. 23/55-C.E. denied by Assistant Commissioner for spray dried silica.
2. Appellants cleared spray dried silica on payment of duty and availed benefit of Notification 217/86-C.E. for sodium silicate.
3. Show cause notice issued demanding duty on sodium silicate used in manufacturing spray dried silica.
4. Commissioner (Appeals) modified adjudication order confirming demand on sodium silicate in spray dried silica.
5. Appellants filed refund claim for portion of duty paid, not disputing demand for that portion.
6. Appellants contesting duty demand on sodium silicate used in manufacturing spray dried silica.
7. Contention that duty cannot be demanded on sodium silicate used in final product cleared with appropriate duty paid.
8. Appellants entitled to benefit of Notification 217/86-C.E. for sodium silicate captively consumed.

Analysis:

1. The appeal was filed against the order-in-appeal denying the benefit of Notification No. 23/55-C.E. for spray dried silica. The Commissioner (Appeals) accepted the appeal, granting the benefit of the said notification to the final product.

2. Appellants cleared spray dried silica on payment of duty and availed the exemption under Notification No. 217/86-C.E. for sodium silicate, an intermediate product used in manufacturing spray dried silica. The demand was raised on sodium silicate due to the exemption granted to the final product.

3. A show cause notice was issued demanding duty on the quantity of sodium silicate used in manufacturing spray dried silica, as the final product was exempted from excise duty.

4. The Commissioner of Central Excise (Appeals) confirmed the demand on sodium silicate contained in the spray dried silica cleared for domestic consumption, modifying the adjudication order.

5. The appellants filed a refund claim for a specific portion of duty paid, not disputing the demand for that particular quantity.

6. The appellants contested the duty demand on sodium silicate used in the manufacturing process of spray dried silica, specifically during the litigation period regarding the exemption under Notification 23/55-C.E.

7. The contention was that duty should not be demanded on the quantity of sodium silicate used in the final product, as the final product was cleared with appropriate duty paid, and no refund was filed after the exemption was granted.

8. The Tribunal held that since the final product was cleared with duty paid and no refund was claimed post the exemption under Notification No. 23/55-C.E., the appellants were entitled to the benefit of Notification 217/86-C.E. for the sodium silicate consumed in the manufacturing process. The impugned order was modified accordingly, and the appeal was disposed of in favor of the appellants.