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2012 (9) TMI 780 - AT - Central ExciseApplication for waiver of pre-deposit demand - addition of value of the IAS column and kits to the value of the marker for the purpose of Central excise duty assessee contended non-inclusion on ground of same being traded items Held that - In the present case, the marker is used for mixing in the kerosene by the Petroleum companies and the test kit and IAS column are used for checking the adulteration in other petroleum product such as petrol and diesel. As the test kit and IAS column are traded item, the same cannot be considered as a part of the manufactured goods i.e marker. Therefore, applicant had made out a strong case for waiver of pre-deposit of dues. Stay petition is allowed Decided in favor of assessee
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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