Full Judgment
2. The molten metal was taken up from the furnace and allowed to solidify for quality testing on spectrometer in the internal Laboratory of the factory. This nondestructive sampling and testing operation is a continuous one. The sample after testing is returned to the melting furnace, melted and used for production of castings. This and entire manufacturing process of castings in the Appellant's factory is well within the knowledge of the Department.
3. During the course of Audit by the Central Excise Audit party in April 1977 it was contended by the Audit Officers that excise duty on such samples was required to be paid since such samples were not exempted from duty. On the insistence of the Audit, the Appellants dealing staff worked out the total quantity of such samples 1316.55 Kg and duty Rs. 34,559=00 was got paid on the spot by the Audit Party, which was debited from R.G.23A Pt-II Register on 09.04.1997 in the presence of the Audit. Again in January 1998 the Appellant paid Rs. 11,382=00 'UNDER PROTEST' for the period from 01.04.1997 to 31.11.1997.
The Appellant being not satisfied and convinced with the Audit objection and action as stated above subsequently filed on 12.05.1998 regular refund applications alongwith connected supporting documents with Divisional Authority disagreeing with the Audit since excise duty on the subject samples drawn and used for testing within the factory of production was not at all chargeable in terms of erstwhile Notification No. 217/86-CE dated 2.4.1986 as well as current Notification No 67/95-CE dated 16.03.1995.
4. Show case notice was issued by the authority and a order dated 6.9.98 was passed rejecting the claims of refund made. On appeal the Commissioner Appeal found.
(i) "That the adjudicating authority has observed that after the spectrometer test the castings attain the stage of final product and are ready for clearance from the factory of the appellants. It is also noted that the remananits of the metal are sent for remelting as foundary returns and never cleared out of their factory. It appears that the samples taken are of the final product itself and these samples do not require any further processing for being treated as final product. The budgetary changes of 1994-95 have made it clear that all the exemption available to samples for whatever purpose have been withdrawn and all samples are required to pay duty at the normal rate, accordingly the present demands have been confirmed and the refunds have been rejected. The findings of the adjudicating authority on the other contentions raised by the appellants viz., applicability of Notfn. No. 217/86 and Notfn. No. 67/95, are acceptable to me. Since on merit the appellants are not entitled or refund, the other grounds taken by the adjudicating authority are not being discussed here".
5. The plea of the ld CDR, made before us, that such solidified molten material will be considered as exigible goods and or casting itself could not be accepted as no chapter heading and classification for these goods has been arrived by the Lower authority seems to us the test of marketability of solidified molten metal samples, was required to be established before duty on them could be determined without passing this marketability test levy of Excise duty on such irregular solidified molten metal is not called for. It was informed by the Ld advocate that for the subsequent period the duty determination has not up hold the duty at such samples.
6. In view of the above and the submissions of the Ld Joint CDR that the classification of the subject goods marketability could be made before levy upon them is considered, the matter is required to be remanded in this case, since he was not in a position to confirm or deny the subsequent change in the departments view, as regards the clearances of similar samples. We agree with the submissions of the Ld Joint CDR and set aside this orders and remit the cases to re-determine the levy, and thereafter to re-determine the refunds in the other appeals. Appeals allowed in above terms.