1999 (3) TMI 299 - AT - Central Excise

Summary

Issues:
Whether Petroleum Jelly is being manufactured at an intermediate stage of the production process of Boroquein Antiseptic Cream.

Analysis:
The case involved two appeals with a common issue of determining whether Petroleum Jelly was being manufactured by the Appellant Company during the production of Boroquein Antiseptic Cream. The Collector of Central Excise had held that the company manufactured Petroleum Jelly and imposed duty for a specific period, along with penalties. The Appellant argued that Petroleum Jelly did not come into existence at any stage and that only the antiseptic cream was produced. The Appellant cited various legal decisions to support their contention that unless a product identifiable in the commercial community exists, it cannot be considered excisable goods.

The Appellant further contended that the department did not consider relevant notifications while calculating the duty and that there was no suppression of facts as all information was available to the department through regular visits and maintained records. The department argued that the final product contained soft paraffin base, synonymous with Petroleum Jelly, and that the change in ingredients was not disclosed with the intent to evade duty. The department emphasized that non-disclosure was a deliberate act as the company switched from using Petroleum Jelly to its ingredients.

Upon considering the arguments, the Tribunal analyzed the process of manufacture and relevant legal principles. The burden of proof was on the department to establish that Petroleum Jelly was manufactured at an intermediary stage and was marketable. The Tribunal observed that the department failed to provide evidence that Petroleum Jelly was produced as a distinct product during the manufacturing process. The test report only indicated the presence of soft paraffin, which was a component of the final product. The Tribunal concluded that the department did not substantiate their claim that Petroleum Jelly was manufactured at an intermediary stage. Therefore, the impugned order was set aside, and both appeals were allowed without delving into the time limit for demanding duty under the Central Excise Act.