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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2012 (9) TMI AT This

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2012 (9) TMI 780 - AT - Central Excise


Issues:
Waiver of pre-deposit of duty, interest, and penalty on imported chemical products; Interpretation of chapter note 10 of chapter 29 of the Tariff; Consideration of 'IAS Column' and 'Test Kit' in calculating Central excise duty; Applicability of previous Supreme Court judgments on adding value of bought-out items to manufactured goods.

Analysis:
The applicant sought a waiver of pre-deposit of duty, interest, and penalty amounting to Rs.1,62,38,249 for importing chemical products, specifically Cyclic Hydrocarbon-Marker, which were repacked for resale. The issue arose when the Revenue wanted to include the value of 'IAS Column' and 'Test Kit' in the calculation of Central excise duty along with the marker. The Revenue relied on Supreme Court judgments like Siddhartha Tubes Ltd. and Frick India Ltd. to argue that bought-out items should be considered part of manufactured goods for duty calculation.

Upon examination, the Tribunal found that the marker was used by Petroleum companies to detect mixing in kerosene, while the 'test kit' and 'IAS column' were utilized to identify adulteration in petrol and diesel. The Tribunal distinguished this case from previous judgments, stating that the marker, test kit, and IAS column served different purposes and were not interconnected in the same way as in the cited cases. As the test kit and IAS column were traded items, they could not be deemed part of the manufactured goods, i.e., the marker. Consequently, the Tribunal concluded that the applicant had a strong case for the waiver of pre-deposit of dues, and the recovery was stayed pending the appeal.

In summary, the judgment focused on the interpretation of chapter note 10 of the Tariff regarding the repacking of imported chemical products, the consideration of additional items like the 'IAS Column' and 'Test Kit' in Central excise duty calculation, and the applicability of previous Supreme Court decisions on adding the value of bought-out items to manufactured goods. The Tribunal's decision emphasized the distinct purposes of the items involved and granted the waiver of pre-deposit based on the specific circumstances of the case.

 

 

 

 

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