2008 (12) TMI 551 - AT - Central Excise

Tribunal finds adjudication order inadequate, emphasizes marketability, duty liability, and tariff interpretation. No recovery during appeal.

The Tribunal ruled in favor of the appellant, finding the order of adjudication inadequate and lacking proper consideration of the appellant's arguments. ... Stay/Dispensation of pre-deposit - Manufacture Issues:1. Interpretation of Central Excise Tariff Act, 1985 regarding duty liability on goods sold through telemarketing.2. Determination of marketability of goods based on packaging and repacking activities.3. Application of chapter notes to ascertain duty liability on goods sold through teleshopping.4. Examination of legal precedents related to repacking activities and marketability of goods.5. Assessment of duty liability on goods cleared through teleshopping and containerization activities.Analysis:1. The appellant argued that the Department's case against them was based on the premise that goods sold through telemarketing, whether in container packing or not, were subject to duty under specific chapters of the Central Excise Tariff Act, 1985. They contended that the goods were marketable without any difference in packaging and that the activity of putting goods into containers for dispatch did not constitute manufacturing. The appellant emphasized that there was no escapement of duty as the goods had already been cleared from the factories with duty paid.2. The appellant further asserted that the repacking activities did not render the goods unmarketable, citing legal precedents and highlighting that marketability was not questioned before the goods were packed in cardboard containers. They argued that invoking chapter notes to classify the appellant as a manufacturer went against established legal principles and previous tribunal decisions regarding similar cases.3. The Revenue representative contended that the goods became marketable due to the teleshopping process and subsequent packing activities by the appellant, making them liable for duty. They argued that the chapter notes of the Central Excise Tariff Act should be applied to the goods cleared by the appellant through teleshopping, emphasizing the marketability achieved through containerization.4. The Tribunal considered the arguments presented by both sides and reviewed the evidence and records. After examining the details of the case and the lack of evidence regarding the extent of clearances with and without second container packing, the Tribunal found that the order of adjudication was non-speaking and failed to address the appellant's pleadings adequately. Due to this legal infirmity and the absence of a basic inquiry by the authorities, the Tribunal ruled in favor of the appellant, directing that there should be no recovery of the demand raised during the appeal's pendency to uphold the interest of justice.5. In conclusion, the Tribunal's decision highlighted the importance of establishing marketability, the impact of repacking activities on duty liability, and the proper interpretation of chapter notes under the Central Excise Tariff Act in cases involving goods sold through teleshopping and containerization activities. The judgment emphasized the need for thorough examination and adherence to legal principles in determining duty liability in such cases.