2001 (3) TMI 379 - AT - Central Excise

Summary

Issues:
Classification of coal ash under Tariff Sub-heading (TSH) 2621.00 and liability to pay excise duty on it.

Analysis:
The appellants, engaged in manufacturing Gelatines, used coal in their power plant for generating electricity. The Department issued show-cause notices (SCNs) for classifying coal ash under TSH 2621.00 and recovering excise duty. The Assistant Commissioner initially accepted the appellants' plea that coal ash was non-excisable. However, the Commissioner (Appeals) overturned this decision, relying on Board's Circular No. 386/19/98-CX. III. The appellants challenged this decision in appeal Nos. E/2633 & 2634/2000-C. Additionally, two other SCNs sought duty recovery on coal ash, which the Commissioner (Appeals) upheld in appeal Nos. E/2635 & 2632/2000-C.

Upon examination, the appellants argued that the Board's Circular, classifying coal ash as excisable under TSH 2621.00, was invalidated by the Gujarat High Court in Ahmedabad Electricity Company Ltd. & Anr. v. Union of India. They contended that coal cinder was not "other ash" under Heading 26.21 and was not excisable. The appellants requested setting aside the Commissioner (Appeals) order based on the circular. The impugned order solely relied on the circular, which the Gujarat High Court deemed invalid, establishing coal ash/cinder as non-excisable. Consequently, the impugned orders were deemed unsustainable, and the appeals were allowed.

In conclusion, the judgment settled the issue of coal ash classification and excisability in favor of the appellants based on the Gujarat High Court ruling. The decision highlighted the importance of legal precedents and authoritative interpretations in determining excisability and classification of goods under the Central Excise Tariff Schedule.