1983 (11) TMI 304 - AT - Central Excise

Tribunal overturns duty demand on colloidal sodium silicate, citing unjustified denial of exemption. Discrepancies in test report clarified.

The Tribunal set aside the demand raised by the Assistant Collector for duty on goods classified as colloidal sodium silicate, ruling that the denial of ... - Issues:1. Interpretation of Notification 154/70 under Central Excise Act.2. Classification of goods as colloidal sodium silicate.3. Validity of demand raised by the Assistant Collector.Analysis:1. The appeal was filed against the order of the Assistant Collector demanding duty from the factory on clearances of goods identified as colloidal sodium silicate. Initially, the Assistant Collector denied concessional assessment under Notification 154/70 and demanded duty. The Appellate Collector remanded the case to re-examine considering other notifications. The subsequent order demanded a reduced amount based on clearances made after considering Notifications 71/78-C.E. and 80/80-C.E. The issue was whether the demand was justified (paragraph 1).2. The factory argued they did not manufacture colloidal sodium silicate and criticized the test procedure used by Central Excise. The department contended that the goods were indeed colloidal sodium silicate and not eligible for exemption under Notification 154/70. The interpretation of Notification 148/81-C.E. was crucial in determining the applicability of the exemption (paragraph 2-3).3. The examination of the test report revealed discrepancies in the description of the sample as refined liquid sodium silicate. The Department argued that colloidal sodium silicate is distinct from refined sodium silicate, but the Tribunal found no conclusive evidence to support this claim. The Tribunal clarified that being a colloid does not preclude sodium silicate from being refined. The sudden denial of exemption without sufficient grounds was deemed unjustified, and the demand was set aside (paragraph 4-6).4. The Tribunal found the Collector (Appeals)'s order and the demand untenable, leading to the decision to set them aside. Other arguments presented by the factory's representative were not addressed due to the outcome of the main issue (paragraph 7-8).