2003 (11) TMI 389 - AT - Central Excise

Tribunal remands case for duty liability review & penalty cancellation. Appellant's arguments on excisable goods and duty classification considered.

The Tribunal remanded the case to the Adjudicating Authority for recomputing the duty liability and set aside the penalty and interest imposed in the ... Demand - Clandestine manufacture and removal of goods - Dutiability - Refractory material Issues:1. Duty demand on excisable goods and penalty confirmation.2. Clearance of goods to job workers without following prescribed procedures.3. Clearance of bulletproof jackets without payment of duty.4. Maintenance of records for scrap removal and Modvat credit.5. Classification of HAFC Grog and Chrome Magnesite Grog under Central Excise Tariff Act.Analysis:1. The appeal was filed against the confirmation of duty demand and penalty by the Commissioner (Appeals). The appellant, a manufacturer of various goods, was accused of removing excisable goods without payment of duty. The Additional Commissioner's order demanding duty and penalty was upheld by the Commissioner (Appeals).2. The appellant claimed to have cleared inputs to job workers for semi-finished steel castings but failed to produce sufficient evidence to support this claim. The Adjudicating Authority found no proof of the proper return of goods after job work, leading to the confirmation of duty demand on this count.3. Regarding the clearance of bulletproof jackets without duty payment, the appellant argued that the jackets were sent to their Head Office for approval and were bound to be returned. However, the Adjudicating Authority noted that the conditions for exemption under Notification No. 64/95-C.E. were not met, leading to the demand for duty payment on the jackets.4. The issue of scrap removal and Modvat credit arose as the appellant failed to maintain separate records for scrap consumption and Modvat credit availed. The Commissioner (Appeals) found ambiguity in determining whether the scrap removal was from Modvat taken material or not, prompting a remand to the Adjudicating Authority for further clarification.5. The classification of HAFC Grog and Chrome Magnesite Grog under the Central Excise Tariff Act was disputed. The appellant argued that these items, being broken refractory material, did not fall under Heading 69.01 of the Tariff. However, the Departmental Representative contended that the items were covered under this heading, citing relevant case law and definitions. The Tribunal remanded the matter to the Adjudicating Authority for recomputing the duty liability and set aside the penalty and interest imposed in the impugned order.