1999 (8) TMI 443 - AT - Central Excise

Summary

Issues:
1. Excisability and classification of Silver Chloride manufactured by M/s. Hindustan Zinc Limited.

Analysis:
The appeal filed by M/s. Hindustan Zinc Limited revolves around the excisability and classification of Silver Chloride manufactured by them. The Commissioner, in the impugned order, confirmed the demand of Central Excise Duty, stating that Silver Chloride is a chemically defined compound containing more than 50% of Silver Chloride and is classifiable under Heading 28.43 of the Central Excise Tariff Act. The Commissioner also highlighted that the impugned product is internationally marketable and relied on specific case laws to support the classification decision. However, the Commissioner acknowledged that there was no wilful suppression of facts, and hence, the extended period of limitation was not applicable.

The appellant's representative argued that the Silver Chloride produced by them is not marketable as it does not meet the purity standards of commercially available Silver Chloride. They emphasized that the impurities present in the Silver Chloride, as supported by expert testimonies and chemical analysis reports, make it unsuitable for commercial sale. Additionally, they pointed out discrepancies in the manufacturing process followed by the appellant compared to standard methods mentioned in chemical references. The appellant's counsel also highlighted the importance of marketability for levying excise duty, citing relevant legal precedents where marketability was a crucial factor in determining excisability.

The respondent, on the other hand, contended that the impurities in the product do not exclude it from falling under Chapter 28 of the Central Excise Tariff Act. They argued that the content of Silver Chloride in the product, as admitted by the appellants, is significant, and impurities do not change its classification. The respondent relied on previous judgments to support their stance on classification and marketability of the product.

After considering the arguments from both sides, the Tribunal found that the product manufactured by the appellants does qualify as Silver Chloride under Chapter 28 of the Tariff Act, despite the presence of impurities. The Tribunal also determined that the Silver Chloride produced by the appellants is marketable based on the manufacturing process, chemical composition, and potential uses mentioned in relevant chemical references. However, the Tribunal noted that the applicability of Notification No. 217/86, which provides certain exemptions, was not considered by the Commissioner. Therefore, the matter was remanded to the Commissioner to reevaluate the applicability of the notification after giving the appellants an opportunity to present their case.

In conclusion, the judgment delves into the excisability and classification of Silver Chloride manufactured by M/s. Hindustan Zinc Limited, emphasizing the importance of marketability, chemical composition, and relevant legal precedents in determining the liability for excise duty. The decision to remand the matter to the Commissioner for further consideration of the exemption notification reflects a comprehensive analysis of the issues raised during the appeal process.