TaxTMI 
TaxTMI 
2010 (1) TMI 601
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....e asbestos cement products, destroyed under Central Excise Supervision and in respect of which remission of duty had been granted, were subsequently sent under job work challans to job workers for grinding the same into powder and the powder called Hard Ground Powder (HGP)/Hard Ground Waste was returned to the appellant's factory from where it was sold. According to the Department, Hard Ground Power(HGP) is chargeable to Central Excise Duty under heading 68.05 of the Central Excise Tariff as "mixtures with a basis of asbestos or with a basis of asbestos and magnesium carbonate" and that its manufacture and sale was not disclosed by the appellants to the Department. Accordingly, a show cause notice dated 23-1-98 was issued to the appellants for demanding Central Excise Duty amounting to Rs. 41,369/- on clearances of the hard ground powder without payment of duty during the period from Nov.' 92 to June' 94. The show cause notice was issued by invoking extended period under proviso to Section 11A(1) of Central Excise Act, 1944 and also proposed imposition of penalty on the appellants under Section 173Q(1) of Central Excise Rules, 1944 read with Section 11AC of Central Excise Act. The ....
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....ed through job workers, but since 1995, this grinding is being done in house. The Department seeks to classify HGP under heading 68.05 as "mixtures with a basis of asbestos or with a basis of asbestos and magnesium carbonate". The HGP is not a mixture with a basis of asbestos or with a basis of asbestos and magnesium carbonate. It consists of cement, sand, fly ash, asbestos-powder etc. and is nothing but pulverised and powdered asbestos cement products which were unmarketable. Just because it fetches a little price, it does not mean that the same is marketable and hence excisable. (2) Tribunal in the case of Super Engineering Co. v. CCE, Rajkot reported in 1996 (82) E.L.T. 539 (Tri.) has held that the process of pulverizing, washing and cleaning of brass dross/ash does not amount of manufacture, as no new marketable commodity with a separate and distinct name, having separate physical and chemical composition or characteristic comes into existence. Attention was invited to the Tribunal's observations in para 10 of its order wherein there is reference to Hon'ble Supreme Court's judgment in the case of Hyderabad Industries Ltd. v. UOI reported in 1995 (78) E.L.T. 641 wherein it has ....
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....correctly classifiable under sub-heading 6805.90 as mixtures with a basis of asbestos. (2) The very fact that the product, in question, is sold by the appellants, shows that it is marketable and since it is marketable and the same is covered under sub-heading 6805.90, it would attract Central Excise Duty. (3) The question as to whether duty is chargeable from the job workers or from the appellants, had never been raised in the proceedings before the Commissioner(Appeals) or before the Dy. Commissioner and hence this issue cannot be raised at this stage before the Tribunal. (4) The broken asbestos sheets had been cleared under private challan to job workers without declaring to the Department and no declaration regarding the production of HGP during the period of dispute had been made to the Deptt. Therefore, the Department is justified in invoking the extended period. 3. We have carefully considered the submissions from both the sides and perused the records. As is clear from the facts narrated in the show cause notice, the goods, in question, - HGP had been obtained by grinding of the broken pieces of asbestos cement corrugated sheets and other asbestos cement products, which ....
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....os articles. The words - "articles of such mixtures or of asbestos" in this heading indicate that one of the uses of the mixtures covered by this heading is fabricating various articles from it. 4.2 In this case, the HGP is a powder obtained by grinding of broken pieces of asbestos cement products. As per the Appellant's submissions in the Appeal memo- (a) HGP is a totally dead material not having any chemical bonding strength and the fly as content of HGP is also dead not having any bonding strength; (b) fibre content present in HGP is practically zero length and it does not add any reinforcement to any finished product; (c) the only use of this material is as landfill to avoid environment pollution; and (d) grinding of broken pieces of asbestos cement products into powder has been resorted to under compulsion of environment protection. 4.2.1 The Department has not produced any evidence in form of chemical test reports to show that the HGP has any bonding strength or that its asbestos fibre content is of usable length and that the HGP can be used for fabricating articles of asbestos. N....