PETITIONER:
ION EXCHANGE (INDIA) LTD.
Vs.
RESPONDENT:
COLLECTOR OF CENTRAL EXCISE, BARODA.
DATE OF JUDGMENT: 02/08/1999
BENCH:
K. VENKATASWAMI. & M.JAGANNADHA RAO,J.
JUDGMENT
M. JAGANNADHA RAO, J. ---------------------
The appellant in these two appeals is the same
and the issues arising in both appeals are also the
same. Civil Appeal No. 2110 of 1988 is filed
against the order of the CEGAT(Delhi) dated
2.2.1988 while Civil Appeal No. 2006 of 1997 is
filed against the order of the CEGAT(Delhi) dated
27.2. 1992. In Civil Appeal No. 2110 of 1988,
the facts are as follows:
The appellant manufactures Ion-Exchanges and
an intermediate product called D.V.B. beads is
consumed in the course of the manufacture of the
Ion Exchanges.
The dispute was confined to the question as to
whether excise duty was leviable on the
intermediate product. Three points arose before
the CEGAT. The first was in relation to whether
the said intermediate products were goods which
were marketable, the second was whether they fell
within the classification in the relevant tariff
item No.15A(1)(ii) and the third related to
limitation. On the third point, all the three
members were agreed that the demand for duty could
not exceed six months preceding the show cause
notice. But on the first and second points there
was difference of opinion. One of the members Sri
V.P.Gulati held that the disputed goods were
distinct items as compared to the end product and
that they were marketable goods inasmuch as the
affidavits produced by the appellant to the
contrary were not acceptable. He also held that
unless the goods were proved by the Revenue to be
plastic materials or resins, they could not be
brought under item no. 15A(1)(ii) and the matter
required a remand to the Collector(Appeals) on that
question. The other two members (Sri S.D.Jha and
Sri Harish Chander) observed that they had some
reservations as to the evidence produced by the
appellant to prove that the beads were not
marketable. On the question of marketability, they
held that once these beads fell in the entry
15A(1)(ii), their marketability was to be treated
as no longer in question. As to the OA
classification, they felt no remand was necessary.
The intermediate product squarely fell within entry
15A(1)(ii). They therefore dismissed the appeal
subject however to the slight modification as to
the period of limitation on which point they were
in agreement with Sri V.P.Gulati. Against the
dismissal of the appeal in the manner as stated
above, the appellant has preferred this appeal.
In the connected Civil Appeal No.2006 of 1997,
the position was that the appellant contended
before the CEGAT that tariff item No.15A(1)(ii) was
not applicable and also that the first appellate
authority had not gone into the marketability of
the intermediate product as the said authority did
not notice the evidence produced by the appellant.
Even so, the Tribunal felt that its judgment dated
2.2.1988 (which is under appeal in Civil Appeal No.
2110 of 1988) was in point and covered the case
against the appellant. (No question of limitation
arose in this case). Following that judgment, the
appeal was dismissed.
In these appeals, we have
heard the learned senior counsel for the appellant
Sri Joseph Vellapally and the learned counsel for
the department, Sri M.Gaurishankar Murthy.
We are of the opinion that in view of the
judgments of this Court in Moti Laminates Pvt.
Ltd. & Others versus Collector of Central Excise,
Ahmedabad [1995 (3) SCC 23] which has been re-
affirmed in Union of India & Another versus Delhi
Cloth & General Mills co. Ltd. & Another [1997
(5) SCC 767], the reasoning of the majority Members
that specification in the tariff is proof of
marketability, cannot be accepted. The evidence as
to marketability that the Revenue may produce is,
in our opinion, to be separately gone into in
conjunction with other evidence that is produced by
the assessee. In the present case, the two members
who have gone merely by the specification, have not
gone into the evidence produced by the parties on
the question of marketability. Hence on that
question, the matter has to be remitted to the
Tribunal. On the other question relating to
whether the intermediate product falls within the
tariff item 15A(1)(ii) or not, one of the members
has directed a remand while the reasoning given by
the other two members is rather cryptic and not
elaborate. We, therefore, think that even on this
point as to whether the beads fall within tariff
entry 15A(1)(ii), the matters have to be remitted
to the Tribunal.
We, accordingly, set aside the judgments of
the Tribunal in both cases and remit the matters to
the Tribunal both on the question as to
marketability of the intermediate products and also
on the question whether they fall within tariff
item 15A(1)(ii). So far as the question of
limitation in Civil Appeal No. 2110 of 1988 is
concerned, the unanimous finding of the CEGAT shall
stand confirmed. The appeals are allowed as stated
above. There will be no order as to costs.