1999 (7) TMI 397 - AT - Central Excise

Summary

Issues involved:
The issue involved in this appeal is whether the product 'D-2 Aminobutanol Tartrate' arising during the manufacture of 'Ethanbutanol Hydrochloride' is excisable goods leviable to duty.

Details of the Judgment:

Issue 1: Marketability of the product
The Collector decided that the impugned product is not excisable goods as it is unstable and non-marketable, not known in the commercial world. The Department argued that the product is a separate chemically defined compound, classifiable under Chapter 29 of the Schedule to the Central Excise Act. They provided evidence that the product is stored, weighed, and its production is recorded in log sheets. The Department also cited a Supreme Court judgment emphasizing that marketability is a question of fact. The Respondents contended that the product is not marketable in its current form and cited previous court decisions. However, they failed to prove the lack of marketability. The Tribunal found that the impugned product is capable of being bought and sold in the market, even if not actually sold, making it excisable goods.

Issue 2: Limitation on demand of duty
The Respondents argued that the demand of duty is time-barred as the show cause notice was issued after a significant period. They claimed that the Central Excise Officers had knowledge of their manufacturing operations and there was no suppression of facts. The Tribunal noted that the Respondents did not file any declaration about the impugned product, which could be considered suppression of facts under the Central Excise Act. The Tribunal held that the demand was not time-barred and allowed the appeal filed by the Department.

In conclusion, the Tribunal set aside the Collector's order and ruled in favor of the Department based on the marketability of the product and the absence of time limitation on the demand of duty.