TMI Blog2013 (12) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... t's opinion also clearly shows that the preparations are mixed prior to their usage and such mixed chemical preparations are prone to oxidation and other chemical reactions which could make them less effective and such chemicals are not marketed - The department has not tested any of the samples to ascertain the shelf life/other parameters relevant for examining the issue of marketability of the products - Merely because certain chemicals are marketed cannot lead to the conclusion that the chemical preparations made in situ by the appellant are also marketable and no effort whatsoever has been made by the Revenue to establish the marketability and Revenue has failed miserably in this regard - various chemical preparations produced by them in situ and captively consumed are not marketable goods falling under CETH 3707 of the Central Excise Tariff. Classification of Silver residue arises out of manufacture - Revenue was of the view that the processing of the film, silver residues which are also obtained are classifiable under Chapter 26 of the Central Excise Tariff – Held that:- The duty demand on silver residue which is arising during the processing of the film, as per Chapter No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are classifiable under Chapter 26 of the Central Excise Tariff and excise duty is payable thereon. The period involved and the demands of duty are as given below: S.No. Order No. Date Period Duty demand (Rs.) 1. 215-225/07-17/V/2009/Commr/KS dated 27/08/2009 1998-2009 8,34,93,810 2. 10/M-I/2010 dated 17/03/2010 June 1998 to Nov 1998 5,41,000 3. 100-101/07-08/V/2011/Commr/KS dated 03/05/2011 2009-2010 2,03,08,421 4. BR/79-80/M-V/2012 dated 23/10/2012 Feb 2009 to Aug 2009 37,46,470 5. 31/09/V/2013/Commr/ANS dated 29/01/2013 Aug 2011 to March 2012 1,20,07,286 Accordingly, show-cause notices were issued to the appellants demanding the above duties and the said duty demands were confirmed along with interest thereon and also by imposing equivalent amount of penalties in the orders cited supra. Aggrieved of the same, the appellants are before us. 3. This case had come up before this Tribunal earlier and this Tribunal vide order No. A/582-587/08/C-II/EB dated 11/07/2008 had remanded the matter bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 12/11/2009. It is in pursuance of the Tribunal's order dated 11/07/2008, the impugned orders have been passed, wherein the duty demands have been once again confirmed holding that the chemical preparations are classifiable under CETH 3707 and the silver residue under Chapter 26 of the Central Excise Tariff. 5. The Ld. Counsel for the appellant submits that there are two issues involved in the present appeals. The first issue is whether the Chemical Preparations for processing Cine Films (CPCF) which are made in situ and captively consumed are marketable or not. The second issue is Hypo Solution Waste (Silver Residue) is classifiable under CETH 2620 or not? 5.1 The issue was first examined by the department as early as in 1998 on the basis of an investigation done by the Director General of Anti Evasion in Bangalore in the case of Prasad Film Laboratories. The adjudicating authority held that various chemical preparations, namely, prebath, developer, bleach, stop bath, fixer bath stabilizer and respective replenisher solutions obtained by mixing various photographic processing chemicals are not marketable as they are prepared in situ and captively consumed and are never sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some of the mixed chemicals are prone to oxidation and other chemical reactions which could make them less effective. Moreover, the storage conditions and the equipment in a tropical country like ours are very different from those recommended, hence as a practice the labs mix chemicals as close to the time of consumption as possible." Thus, from the technical opinion given by M/s.Kodak India Ltd., it is clear that the chemical preparations used in the processing of cinematographic films are not goods, let alone excisable goods. 5.3 As regards the classification of Hypo Solution Waste (Silver Residue), as per the HSN explanatory note, waste of precious metal is classifiable under Chapter 71 and Chapter 26 specifically excludes the waste of precious metals. Under Chapter 71, silver is exempt from duty and therefore, the impugned demands are not sustainable in law. 5.4 The Ld. Counsel further submits that the adjudicating authority in spite of specific directions from this Tribunal to examine the marketability aspect of the goods has not examined this aspect at all and has merely confirmed the duty demand based on the earlier decision of the Commissioner vide order No.5/2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e" was substituted by words Appeal is disposed off". The order dated 27/08/2009 was passed during the interregnum i.e. between the orders dated 24/06/2009 and 12/11/2009 passed by the Hon'ble High Court of Bombay. Therefore, the adjudicating authority misread the order of the Hon'ble High Court dated 24/06/2009 and hence did not consider the issue of marketability and therefore, the matter be remanded back for fresh decision. As regards the silver residue, it is fairly conceded by the Revenue that the product merits classification under Chapter 71 and not under Chapter 26. 7. We have carefully considered the submissions made by both the sides. 7.1 This Tribunal while remained the matter back vide order dated 11/07/2008 had clearly directed the adjudicating authority to apply his mind independently on the submissions made by the appellant as regards the marketability of the products and give a detailed and speaking order on the issue. However, in the impugned order, the adjudicating authority has failed to comply with this direction and has not given any independent findings as to the marketability of the products but has merely followed the earlier findings in order of 26/06/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mixed prior to their usage and such mixed chemical preparations are prone to oxidation and other chemical reactions which could make them less effective and such chemicals are not marketed. The department has not tested any of the samples to ascertain the shelf life/other parameters relevant for examining the issue of marketability of the products. In other words, the expert's opinion adduced by the appellant form M/s. Kodak India Ltd. has not been rebutted at all. In Bhor Industries Ltd. case [1989 (40) ELT 280 (SC)] the hon'ble Apex Court held that simply because a certain article falls within the schedule, it would not be dutiable under excise law, if the said article is not goods" known to the market. Marketability is, therefore, an essential ingredient in order to be dutiable under the Schedule to the Central Excise Act." The Hon'ble Apex Court further held that the burden to prove goods" is on the department which in the present case the appellant has not discharged at all. 7.4 During the course of the arguments, it has been submitted by the DR that various chemical preparations used in cine film processing are marketed by many including M/s. Kodak India Ltd. However, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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