2006 (9) TMI 42

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..... Schedule attracting duty @ 18% ad valorem and captively using such preparations for processing cinematographic films (final product). It also appeared to the department that the respondents were manufacturing 'spent hypo-solutions' classifiable under sub-heading 3823.00/3824.90 attracting duty @ 18% ad valorem and captively using the same in the manufacture of raw silver (Chapter 71 of the CETA Schedule) which was cleared at nil rate of duty. As the final products viz. processed cinematographic films and raw silver were exempt from payment of duty, the department wanted to levy duty of excise on the chemical preparations and the spent hypo-solutions. Hence a show cause notice dated 31-8-1998 was issued by the Directorate-General of Anti-Eva .....

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..... ent is against the appellate Commissioner's order. 3.We find that the order passed by learned Commissioner in adjudication of show cause notice dated 31-8-1998 is eminently reasoned and does not call for interference. In the case of Famous Cine Laboratory (supra) relied on by the Commissioner, hypo-solution was found to be ephemeral in nature and hence held to be not marketable, in the absence of evidence of marketability. In the present case also, we have not found any evidence of marketability of the chemical preparations made by the respondents and captively used in the processing of cinematographic films. These preparations had a shelf-life ranging from 2 to 8 weeks as stated by the appellant. But it has not been shown that, despite th .....

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..... . Here again, the Department seeks to rely the evidence gathered from one M/s. Prasad Laboratories, who stated that spent hypo-solution left behind after extraction of silver could be recycled or even sold. This statement of M/s. Prasad Laboratories is not enough to hold that the spent hypo-solution of the respondents was marketable, nor does the evidence meet the Commissioner's finding that spent hypo-solution remains the same before and after extraction of silver. Therefore, the department has not succeeded in establishing that spent hypo-solution of the respondents is excisable. As rightly held by learned Commissioner, the onus is on the department to prove that the chemical preparations and spent hypo-solution captively used by the resp .....

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