Tribunal exempts brass billets/rods from excise duty under Notification No. 67/95-CE. Upholds appellant's appeal.

The Tribunal ruled that the intermediate goods (brass billets/rods) are not excisable, granting the appellant exemption under Notification No. 67/95-CE. The demand for excise duty was deemed unsustainable due to the non-marketability of the intermediate goods and non-suppression of facts by the appellant. As a result, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant.

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Issues Involved:
1. Whether the intermediate goods (brass billets/rods) are liable to excise duty.
2. Applicability of Notification No. 67/95-CE for exemption on intermediate goods.
3. Whether the demand is hit by limitation due to non-suppression of facts by the appellant.

Issue-wise Detailed Analysis:

1. Liability of Intermediate Goods to Excise Duty:
The appellant argued that the intermediate goods (brass billets/rods) emerged during the manufacturing process of brass wires are not excisable. They contended that these goods are not marketable as they are used in a continuous and uninterrupted manner in a red-hot condition and do not attain a status of marketable goods. The department, however, claimed that these intermediate goods are rods and are excisable. The Tribunal found that the intermediate product does not have a uniform solid cross-section along its whole length, as required by the definition of rods under Chapter 74 of the Central Excise Tariff Act. Therefore, the intermediate product is not considered rods and is not excisable. The Tribunal concluded that the demand for excise duty on these intermediate goods is not sustainable.

2. Applicability of Notification No. 67/95-CE:
The appellant claimed exemption under Notification No. 67/95-CE for the intermediate goods. The Tribunal noted that the exemption is available if the manufacturer does not avail of Cenvat credit on inputs used in the manufacture of exempted goods. The appellant did not take Cenvat credit on the brass scrap received from the principal, thus fulfilling the obligation under Rule 6(1) of the Cenvat Credit Rules. The Tribunal referred to previous judgments which supported the appellant’s claim for exemption under Notification No. 67/95-CE, concluding that the intermediate goods are eligible for exemption.

3. Limitation and Non-suppression of Facts:
The appellant argued that the demand is hit by limitation as all relevant details were within the knowledge of the department. The Tribunal found that the appellant had filed classification lists and declarations, and the department was aware of the manufacturing process and the emergence of intermediate products. Therefore, there was no suppression of facts or mis-declaration by the appellant. Consequently, the demand for the extended period is not justified.

Conclusion:
The Tribunal held that the intermediate goods are not excisable, the appellant is eligible for exemption under Notification No. 67/95-CE, and the demand is hit by limitation due to the absence of suppression of facts. The impugned order was set aside, and the appeal was allowed.

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