1999 (7) TMI 475 - AT - Central Excise

Summary

Issues Involved:
1. Excisability of intermediate products.
2. Marketability of intermediate products.
3. Classification under Chapter 29 of the Central Excise Tariff Act.
4. Time-bar of the demand under Section 11A(1) of the Central Excise Act.

Detailed Analysis:

1. Excisability of Intermediate Products:
The primary issue in this appeal is the excisability of five intermediate products arising during the manufacture of bulk drugs. The Collector confirmed the demand for Central Excise duty on these products, which were captively consumed. The appellant argued that these intermediate products were in-process materials in crude form, not marketable, and not goods as they were neither ordinarily marketable nor had they been ever marketed. They were not pure, stable, or known to technical literature.

2. Marketability of Intermediate Products:
The appellant contended that marketability must be established first before considering the tariff entry. They argued that the Department must prove that these intermediate products, in their state, were of purity and standard conforming to reputed books of science or acceptable to trade users. The Revenue countered by stating that marketability means the goods are capable of being brought and sold in the market, irrespective of actual sales. The fact that the products were recorded, stored, and weighed indicated they were stable and could be sold to another industrial user.

3. Classification under Chapter 29 of the Central Excise Tariff Act:
The Chemical Examiner's report indicated that the intermediate products were organic compounds, classifiable under Chapter 29. The appellant claimed these were not separately chemically defined compounds. However, the Chemical Examiner, considering the appellant's write-up, confirmed the products as organic chemicals. The Tribunal observed that the appellant failed to provide evidence to counter the Chemical Examiner's findings. The affidavits from traders were not sufficient to disregard the expert findings. The Tribunal upheld that the products were classifiable under Chapter 29.

4. Time-bar of the Demand under Section 11A(1) of the Central Excise Act:
The appellant argued that the demand was time-barred as it was issued beyond the normal six-month limit. They had submitted the process of manufacture to the Department, indicating no intent to conceal. The Tribunal found that the letter did not disclose the manufacture of the impugned products. The Tribunal referenced previous decisions, noting that if an assessee does not file the required declarations or classification lists, it amounts to suppression, allowing the extended time limit of five years. The samples drawn from another factory did not constitute knowledge for the unit in question. Thus, the demand was not time-barred.

Conclusion:
The Tribunal upheld the Collector's order, confirming the excisability and marketability of the intermediate products, their classification under Chapter 29, and the applicability of the extended time limit for the demand. The appeal was rejected.