Custom, Excise & Service Tax Tribunal
Yazaki India Pvt Ltd vs Cgst & Central Excise Ahmedabad North on 15 September, 2025
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Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO. 02
Excise Appeal No. 11781 of 2017
(Arising out of OIA-AHM-EXCUS-002-APP-14-17-18 dated 21/06/2017 passed by
Commissioner (Appeals) Central Excise, AHMEDABAD-II)
Yazaki India Pvt Ltd .....Appellant
A-4, Tata Motors, Vendor Park S No. 1,
North Kotpura, Viroch Nagar,
Sanand, Ahmedabad, Gujarat
VERSUS
CGST & CE-Ahmedabad North .....Respondent
1st Floor, Custom House, Navrangpura Ahmedabad-3800009 WITH Excise Appeal No. 11815 of 2017 (Arising out of OIA-AHM-EXCUS-002-APP-15-17-18 dated 28/06/2017 passed by Commissioner (Appeals), Central Excise, Customs and Service Tax AHMEDABAD-II) Yazaki India Pvt Ltd .....Appellant A-4, Tata Motors, Vendor Park S No. 1, North Kotpura, Viroch Nagar, Sanand, Ahmedabad, Gujarat VERSUS C.C.E.-Ahmedabad-ii .....Respondent Custom House... First Floor, Old High Court Road, Navrangpura, Ahmedabad, Gujarat-380009 AND Excise Appeal No. 11941 of 2019 (Arising out of OIA-AHM-EXCUS-002-APP-228-18-19 dated 07/05/2019 passed by Commissioner ( Appeals ), Central Excise, Customs and Service Tax-AHMEDABAD-II) Yazaki India Pvt Ltd .....Appellant A-4, Tata Motors, Vendor Park S No. 1, North Kotpura, Viroch Nagar, Sanand, Ahmedabad, Gujarat
2|Page E/11781,11815/2017 & E/11941/2019-DB VERSUS C.C.E.-Ahmedabad-ii .....Respondent Custom House... First Floor, Old High Court Road, Navrangpura, Ahmedabad, Gujarat-380009 APPEARANCE:
Shri. Anand Nainawati, Advocate for the appellant Shri. Rajesh R Kurup, Superintendent (AR) for the Respondent CORAM: HON'BLE MR. SOMESH ARORA, MEMBER ( JUDICIAL ) HON'BLE MR. SATENDRA VIKRAM SINGH, MEMBER ( TECHNICAL ) Final Order No. 10729-10731/2025__ DATE OF HEARING: 24.06.2025 DATE OF DECISION:15.09.2025 SATENDRA VIKRAM SINGH M/s. Yazaki India Pvt Ltd, Viroch Nagar, Ahmedabad (Appellants) are manufacturing Wiring Harness falling under Chapter 85 of the Central Excise Tariff Act, 1985. They procure PVC insulated copper wires and during the manufacturing process, waste & scrap of PVC copper wires is generated which they clear without payment of Central Excise Duty. The appellants were issued four show cause notices dated 05.03.2015, 03.12.2015, 01.05.2017 & 08.11.2017 covering the period from April, 2010 to June 2017 asking them to pay appropriate Central Excise Duty total Rs. 19,94,608/-
under Section 11A of the Central Excise Act, 1944 along with interest under Section 11AA and penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. 1.1 The issue was decided by the Adjudicating Authority who as per the following details, confirmed the central Excise Duty upon the appellant along with interest and also imposed penalty upon the appellants under section 11AC of the Central Excise Act, 1944.
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Sr SCN No. Period Duty Amt. OIO No OIA No.
No Including
. Cess
1. VI-85/15-140/OA/2014 April 2010 to 1321497/- 38/ADC/2015/MKR Ahm-Excus-
Dated: 05.03.2015 October,2014 dated 31.12.2015 002-app-14-
17-18 dated
27.06.2017
2. III/SCN/Asaki/63/15-16 November 380246/- 21/Ac/D/App/2016 Ahm-Excus-
dated 03.12.2015 2014 to dated 29.02.2016 002-app-15-
September 17-18 dated
2015 18.07.2017
(a) AR-III/Yazaki/FAR- October 2015 122775/- AR- Ahm-Excus-
214/13-14 dated to December, IV/YIL/Supdt/SSM/02 002-app-228-
3. 01.05.2017 2016 -03/2018-19 dated 18-19 dated
(b)AR- January 2017 170090/- 30.11.2018 07.05.2019
IV/PerSCN/Yazaki/para- to June 2017
6/17-18 dated
08.11.2017
1.2 Against these orders, the appellant filed appeals before the
commissioner (Appeals) who vide impugned orders (as detailed in above table) upheld the orders the lower authority and rejected the party‟s appeals. Aggrieved with the above orders, the appellant filed three appeals bearing No. E/11781/2017, E/11815/2017 & E/11941/2019 before this Tribunal.
2. The Appellant has taken the following grounds:-
(a) The Appellate Authority though agreed with the decision of Hon‟ble Supreme Court in the case of Finolex Cable Ltd vs. commissioner of Central Excise, Pune-II reported in 2002 (146) ELT A100 but he tried to get away by saying that the said case pertains to Jelly Filled Telecommunication Wire.
In this case, only end cuttings of PVC Copper Wires are left out during which does not amount to manufacture and therefore, Excise Duty is not leviable on said goods.
(b) He has taken note of the decision of the Larger Bench of Hon‟ble CESTAT in the case of Hindalco Industries Limited Vs. CCE Belapur Mumbai- III reported at 2014 (308) ELT 472 (Tri-LB) and stated that the following ground should be satisfied for excisable goods to emerge during the manufacturing process:-
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1. A different commodity in the form of scrap.
2. It should be classified under Central Excise Tariff Act, 1985.
3. Such scrap is marketable.
(c) The Appellate Authority has held that copper wire scrap with various types of insulation is covered by "ISRI Code word DRUID" and hence, these are covered under heading 7404 00 12 and liable to excise duty. In their case, scrap which emerges are insulated copper wires of less than 12 inch length.
(d) The Hon‟ble Supreme Court in the case of Commissioner Vs. CMI Ltd.- 2003 (152) ELT A106 (S.C) has upheld the order No. 191/2002-B dated 14.05.2002 of the Tribunal reported in 2002 (143) ELT 2009 (Tri-Del.). In this order, the Tribunal has held that end cuttings of PVC wires and copper wire are non excisable goods.
(e) They are engaged in manufacture of integrated automobile wire harness sets falling under Chapter 85443000 by using various components like tape, connectors, terminal and PVC insulated wire of various sizes. Waste and scrap of PVC insulated wires arising in this process cannot be covered under manufacture as defined under Section 2(f) of the Central Excise Act, 1944 and hence, not liable to Excise duty.
(f) As per Note 8 to Section XV of the CETA, 1985, "waste and scrap"
given under Chapter 74 has to be the one which has arisen from the mechanical working of metals, and not in the situation as exists in Appellant‟s case. Therefore, end cutting in their case are not classifiable under Chapter heading 7404. Since, there is no specific entry in the Central Excise Tariff Act, therefore, it is out of perview of Section 3 of the Central Excise Act, 1944.
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(g) Inserting explanation under Section 2(d) of the Central Excise Act, 1944 in 2008 does not impact their case. They rely on the decision in the case of Hindalco Industris Ltd Vs. Unition of India reported in 2014-TIOL-
2266-HC-MUM-CX. They cited various other case laws to emphasize on the process of manufacture and pleaded that the product in their case does not amount to manufacture and hence, not liable to excise duty.
(h) Hon‟ble Supreme Court in the case of Commissioner of Central Excise Vs. Wimco Ltd reported at 2007 (217) ELT 3 (SC) held that waste, scrap and parings of paper and paperboard generated during the manufacturing of printed paperboard boxes as not amounting to manufacture. Merely because there is a tariff entry, goods cannot become excisable unless manufacture is involved.
(i) Hon‟ble Allahabad High Court in the case of Balrampur Chini Mills Ltd Vs. Union of India reported at 2014 (300) ELT 372 (All.) has dealt with the issue covering amendment to Section 2(d) of the Central Excise Act, 1944 by inserting explanation. Vide this amendment w.e.f 13.05.2008 "excisable goods" means goods specified in the first Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt.
Explanation- for the purposes of this clause, "goods" includes any article, material and substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable.
(j) Extended period is not invokable in their case. Since, there is no suppression of material facts, no penalty is imposable. They relied on the following case laws:-
ACCURATE CHEMICALS INDUSTRIES VS. COMMR. OF C.EX., NOIDA-2014 (300) ELT 451 (Tri.-Del)
6|Page E/11781,11815/2017 & E/11941/2019-DB ISPAT INDUSTRIES LTD. VS. COMMISSIONER OF CENTRAL EXCISE, RAIGAD-2006 (199) ELT 509 (Tri-Mumbai) CONTINENTAL FOUNDATION JT. VENTURE Vs. COMMR. OF C.EX., CHANDIGARH-I-2007 (216) ELT 177 (S.C) UNION OF INDIA Vs. RAJASTHAN SPINNING & WEAVING MILLS- 2009 (238) ELT 3 (S.C)
(k) In view of the above, they prayed to set aside the impugned order and grant them the relief.
3. During hearing, learned Advocate emphasized their grounds taken in the appeals. He mentioned that they import/locally procure copper wires/PVC wires to manufacture wire harness. The issue of non payment of excise duty on such waste and scrap( i.e. end cuttings of PVC wire) was pointed out by Audit officers. After enquiry, show cause notices have been issued to the appellant. An identical issue has been decided by the Hon‟ble Supreme Court in the case of CMI Ltd Vs. CCE Noida 2003 (152) ELT A103 by upholding the decision of the Tribunal in the case which Vide Order reported in 2002 (143) ELT 209 (Tribunal) had held that end cutting of wires and cables are not excisable and therefore, no excise duty is payable. Likewise, Bombay High Court in the case of Indian Aluminium Co. Ltd. Vs. A. K. Bandyopadyay reported in 1980 (6) ELT 146 (Bom.) has held that "dross and skimming" cannot be termed as "goods". He emphasized that for excisability, a new and different articles with a distinctive name, character or use should emerge and that in ordinary course of trade can be bought and sold. He also relied on the decision of Hon‟ble Supreme Court in the case of Union of India Vs. Ahmedabad Electricity Co. Ltd report in 2003 (158) ELT 3 (S.C) and Grasim Industries Ltd. Vs. Union of India reported in 2011 (273) ELT 10(S.C). In the case of Union of India Vs. DSCL Sugar Ltd reported at 2015 (322)ELT 769 (S.C), Hon‟ble Apex Court held that emergence of
7|Page E/11781,11815/2017 & E/11941/2019-DB resultant waste and residue of agriculture produce e.g., bagasse does not amount to manufacture, being itself not result of any process, hence not excisable. He also emphasised that extended period is not invokable in their case and there cannot be any suppression of facts with entire transaction has been done in accordance when the provisions of law. It has been held that not furnishing of information which is not required under the law to be submitted, does not amount of suppression of facts. He placed reliance on the following two cases:
Apex Electricals Pvt. Ltd. Vs. UOI -1992 (61) ELT 413 (Guj. HC) Unique Resin Industries Vs. CCE-1995 (75) ELT 861 (T) For penalty, he argued that there is no positive action on the part of the appellant nor have they suppressed any facts from the department, therefore penalty is also not imposable on them.
4. Learned AR on the other hand, drawn the attention of the bench on various paras of the OIO to press that entry 7404 covering various types of copper wire scrap also covers various scraps of PVC insulated wires as "ISRI Code word DRUID" covered under CTH 74040012. He also highlighted that such scrap is sold in the price range of Rs. 240 to 260 per Kgs to different buyers on regular basis. This waste is also known by separate item code in the domestic and international market. Therefore, it is excisable in terms of Section 2 (d) of the Central Excise Act, 1944. He also justified invocation of extended period on the ground that the appellant has not declared clearances of „waste of PVC copper wire‟ in their Daily Stock Account and ER- 1 return. He therefore prayed to uphold the orders of the appellate authority and rejecting the appeal. He relied on the decision of Hon‟ble Apex Court in the case of union of India Vs. Delhi Cloth and General Mills Co. Ltd -1977 ELT (J199) regarding excisability of a product. On Limitation, he relied on the following cases:-
8|Page E/11781,11815/2017 & E/11941/2019-DB Bharat small arms ltd Vs. CCE, CHANDIGARDH-II-2001 (135) ELT 1106 (Tri.-Del.) MARUTI UDYOG LIMITED VS CCE, NEW DELHI-2001 (134) ELT 269 (Tri-Del.) MADRAS PETRO CHEM LTD. VS. CCE-1999 (108) ELT 611 (S.C) CONCEPT PHARMACEUTICALS LTD VS. CCE, AURANGABAD-2015 (319) ELT 129 (Tri-Mumbai)
5. We have heard the rival submissions. We find that the issue is squarely covered by the decision of Hon‟ble Supreme Court in the case of CCE Vs. CMI Ltd. reported at 2003 (152) ELT A106 (S.C) wherein Hon‟ble Supreme Court by relying upon its earlier decision in the case of Finolex Cable upheld the decision of the Tribunal reported at 2002 (143) ELT 209 (T). The Tribunal in its order had held that end cutting of insulated wires and cables are not excisable and therefore no excise duty is payable..
5.1 We also find that Mumbai Tribunal in the case of the Appellant itself vide Final order No. A/87446/2024 dated 04.12.2024 has decided the very same issue i.e. dutiability of scrap of copper/PVC wire for the period August 2009 to May 2014. The relevant para 4 and 5 of the said order is reproduced below:-
"4. We find that the generation of waste and scrap of PVC insulated wires/copper wires are not arising out of any manufacturing process and those were simply the end cuttings of the wires procured by the respondents for the manufacture the final products. Since generation of waste and scrap cannot be considered as arising out of any manufacturing process, such activity undertaken by the respondent, in our considered view, would not attract payment of central excise duty. Further, the Department had also not correctly classified the goods under Chapter Heading 7404 to hold that the respondents should be liable for payment of central excise duty on the waste and scrap of PVC insulated wires generated during the course of manufacture of final products. We find that the issue arising out of the present dispute has already been dealt with by the Co-ordinate Bench of the Tribunal, in the case of Finolex Cable Ltd. Vs. Commissioner of Central Excise, Pune-I- reported in 2024 (6) TMI 618 CESTAT MUMBAI. On identical set of facts, the Tribunal has held that waste and scrap arising during the manufacture of cables are not liable for payment of central excise duty.
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5. In view of the foregoing discussions, we do not find any infirmity in the impugned order, insofar as it has dropped the show cause proceedings initiated against the respondents. Therefore, appeal filed by Revenue is dismissed."
5.2 In view of the above cited decisions and the order No. A/87446/2024 dated 04.12.2024 of Cestat Mumbai in the case of appellant themselves, we do not find any reason to deviate from the above findings. Therefore, we allow all the three appeals filed by the appellant.
6. Appeals allowed.
(Pronounced in the open court on 15.09.2025 ) (SOMESH ARORA) MEMBER ( JUDICIAL ) (SATENDRA VIKRAM SINGH) MEMBER ( TECHNICAL ) Prachi