2007 (5) TMI 34 - AT - Central Excise

Dutiability Revenue contended that appellant liable to pay excise duty on the intermediate product use for manufacture of exempted product Evidence not able to proof the above product is marketable and hence revenue contention is rejected

Summary

Issues:
- Duty liability of intermediate products like Gold Chloride, Silver Chloride, Yellow Salt of Platinum, Yellow Salt of Palladium, Red Salt of Platinum, and Ruthenium Oxide.
- Marketability of the intermediate products.
- Time limitation for the show cause notice.

Analysis:
1. Duty Liability of Intermediate Products:
The Revenue sought to charge excise duty on the intermediate products based on their consumption in manufacturing exempted products. The appellant argued against excisability, claiming the products were not marketable. However, the tribunal found evidence of marketability, including products offered for sale on websites and transactions between units. The tribunal reasoned that even if the products had lower purity and metal content, they still held value due to their precious metal content. The tribunal concluded that the products were marketable and, therefore, excisable.

2. Marketability of Intermediate Products:
The appellant contended that there was no evidence of marketability for certain intermediate products. The tribunal referenced a previous judgment and Supreme Court decisions, emphasizing the need for positive evidence of marketability to charge excise duty. Without such evidence, the tribunal ruled that no demand could be sustained for captively consumed intermediate products lacking proof of marketability.

3. Time Limitation for Show Cause Notice:
The appellant argued that the entire show cause notice was time-barred. However, the tribunal focused on the lack of positive evidence regarding marketability and did not delve into the limitation aspect. The tribunal set aside the impugned order based on the lack of evidence supporting the marketability of the products, without addressing the time limitation argument.

In conclusion, the tribunal ruled in favor of the appellants, setting aside the duty liability on certain intermediate products due to the absence of concrete evidence of marketability. The judgment highlighted the importance of proving marketability for charging excise duty on captively consumed intermediate products, as established in previous judgments and Supreme Court decisions.