Customs, Excise and Gold Tribunal - Delhi
Cce vs Birla Corporation Ltd., Banswara ... on 3 December, 2004
Equivalent citations: 2005(98)ECC748, 2005(181)ELT263(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. In these appeals, the Revenue have questioned the validity of the impugned Order-in-appeal which is common in all these appeals, passed by the Commissioner(appeals).
2. In appeal No.E/4325 and 4324/04-NBC, the counsel for the respondents are present while in other appeals none has come present and no request for adjournment has been received from the respondents and as such, we proceed to decide these appeals also along with other appeals.
3. In appeals No.E/4325, 4324 and 4327/04-NBC the issue involved is common and relates to the duty liability of the respondents in respect of the wear and tear/waste and scrap of the capital goods cleared by them without payment of duty, whereas in appeal No.E/4236/04-NBC, the issue relates to the refund of duty already paid by the respondents on the waste and scrap of the capital goods. The issues being common, all these appeals are being disposed of by this common order.
4. The learned SDR has contended that wear and tear/waste and scrap of the capital goods cleared by the respondents is dutiable under Tariff being classifiable under heading 3915, 4017 and 7204.90 of the CETA and as such, they were liable to pay duty at the rate specified under these headings, at the time clearance. She had also referred to the grounds of appeals and contended that wear and tear/waste and scrap being manufactured product, are chargeable to duty and this aspect had been over look by the authorities below. Therefore, the impugned order deserves to be set aside.
5. On the other hand, learned counsels for the respondents have contended that wear and tear/waste and scrap having not arisen during the course of manufacture, no duty could be claimed in respect thereof. They have also referred to the provisions of rule 3 sub rule (4) of the CENVAT Credit Rules, 2001 and contended that under the said rule, it is only where inputs/capital goods as such are removed by the assessee, the reversal of credit of duty demand can be claimed by the Revenue. The counsel in appeal No.E/4324/04-NBC has further contended that the respondents had not even availed credit on the capital goods, the wears and tears of which were sold by them, and as such, no duty at all could be claimed from them.
6. We have heard both sides and gone through the record.
7. We find that scrap in question was cleared by the respondents during the period 1.6.2000 onwards. Therefore, their case is governed by the CENVAT Credit Rules, 2000/2001, wherein no provision for the demand of duty on the waste and scrap of the capital goods has been made. Rule 3 (4) of the CENVAT Credit Rule, 2001 only enacts that where inputs/capital goods as such have been cleared by the assessee, he will be liable to reverse the credit/pay duty in respect thereof. But this rule does not speak of reversal of credit or payment of duty by the assessee on the waste and scrap of the capital goods at the time of clearance.
8. Apart from this, the scrap cleared by the respondents cannot be said to be the goods manufactured by them. These were only wear and tear/scrap arising during the use of the capital goods and as such did not fall within the ambit of Section 2(f) of the Act, for the purpose of charging of the duty. the dismantling of the capital goods and waste arising in that process also cannot be said to be manufactured goods. In this view, we find corroboration from the ratio of law laid down in Hindustan Petroleum Corporation Ltd. v. CCE, Vishakapatnam - 2002 (144) ELT-555 wherein it has been so observed. Similarly, in the case of International Tobacco Co. Ltd. v. CCE, Ghaziabad - 2004 (165) ELT-314, it has been observed that since no process of manufacture is involved in respect of waste and scrap which is generated during the course of final products by the assessee no duty can be demand. The ratio of law laid down in these cases also squarely covers the issue involved in the present cases.
9. In the light of the discussions made above, we do not find any illegality in the impugned order of the Commissioner (appeals) and the same is upheld in all these appeals.
10. The appeals of the Revenue are dismissed.