2005 (12) TMI 146 - AT - Central Excise

Appellate tribunal remands excisability decision on spent solvents, emphasizes detailed assessment. No interest/penalties.

The appellate tribunal allowed the appeal by way of remand, directing the original authority to determine the excisability of spent solvents generated by ... Spent solvents - Excisability - Interest Issues:Excisability of spent solvents and scrap of packing materials without payment of duty.Analysis:The case involved the manufacturing of bulk drugs and intermediates, resulting in the emergence of 'spent solvents' and scrap of packing materials. The Department issued a show cause notice demanding excise duty on the clearances of spent solvents and scrap without payment, along with interest and penalties under relevant provisions. The original authority confirmed the duty demand and imposed penalties on the company and its Managing Director. The company appealed to the Commissioner (Appeals), arguing that spent solvents were not excisable. The appellate authority accepted this argument based on Supreme Court judgments and set aside the duty demand and penalties.The appellate tribunal noted that the excisability of spent solvents was not raised before the original authority but was argued before the appellate authority. The Commissioner (Appeals) relied on Supreme Court decisions to conclude that spent solvents were not excisable. The tribunal considered the argument that a similar case was remanded by the Bangalore Bench for fresh adjudication, emphasizing that the nature and composition of spent solvents could vary between manufacturing units. As excisability is a mixed question of fact and law, it cannot be solely decided based on judicial pronouncements. Therefore, the tribunal set aside the lower authorities' orders and directed the original authority to determine whether spent solvents from the Pondicherry unit were manufactured and marketable, remanding the matter for further examination.In conclusion, the tribunal allowed the appeal by way of remand, instructing the original authority to decide on the excisability of spent solvents generated by the Pondicherry unit. The authority was directed to pass a detailed order on the issue and proceed accordingly. No interest on duty or penalties were to be imposed since the duty had been paid before the show-cause notice. The tribunal emphasized the need for a thorough examination at the original level to determine excisability, highlighting the specific circumstances of each manufacturing unit.