Custom, Excise & Service Tax Tribunal
Cce, Ghaziabad vs M/S. Met Trade India Ltd on 9 October, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
COURT NO. III
Excise Appeal No. 1998/2006-EX(DB)
[Arising out of Order-In-Appeal No. 41-CE/GZB/2006 dated 12.04.2006 passed by CCE, Jaipur-ll]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
Honble Mr. Manmohan Singh, Judicial Member
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
CCE, Ghaziabad Appellant
Vs.
M/s. Met Trade India Ltd. Respondents
Coram: Honble Ms. Archana Wadhwa, Judicial Member Honble Mr. Manmohan Singh, Technical Member Appearance:
Ms. Shweta Bector, DR for the Appellant Shri Praveen Sharma, Advocate for the Respondent Date of Hearing: 09.10.2013 FO ORDER NO._58180/2013_ Per Ms. Archana Wadhwa:
Being aggrieved with the order passed by Commissioner (Appeals), revenue has filed the present appeal. We have heard Ms. Shweta Bector, learned DR appearing for the revenue and Shri Parveen Sharma, learned Advocate appearing for the respondent.
2. As per facts on record the respondents are engaged in the manufacture of Refined Lead, Un-wrought Lead, Lead Selenium Alloy, Arsenic Master Alloy, Lead Alloy with Antimony falling under sub-heading No. 7801.90 of the schedule of the Tariff Act, 1985.
3. The respondent purchased old and rejected batteries falling under Sub-heading No. 8507.00 from open market without payment of duty as well as from registered Central Excise assessee on payment of Central Excise duty as input to their final product i.e. Lead Ingots. The old and rejected batteries purchased from registered manufacturer are duty paid on which the appellants availed Cenvat credit under the provisions of erstwhile Central Excise Rules, 1944 and Cenvat cedit Rules, 2001/2002, as the case may be at relevant point of time. The old and rejected batteries so purchased are dismantled and lead content is separated from there as input to their final products. As per Revenue, the waste and scrap of plastic so generated, in this course of dismantling of old and rejected batteries and sold to different buyers is a process ancillary to the process of manufacture as defined in section 2 (f) of the Central Excise Act, 1944.
4. During the course of audit of the appellants unit, it was noticed that they were paying duty only on the waste and scrap of plastic generated out of duty paid old and rejected batteries but not on that scrap which generated out of rejected batteries purchased form open market. Since this fact was never disclosed by the appellants to the department either in their ER-1 or through any written communication by the party, it was therefore, clear that they had suppressed these facts from the department with intent to evade payment of duty. Further scrutiny of records revealed that during the period 01.04.2000 to 31.03.2004, the appellants had evaded Central Excise duty to the tune of Rs. 5,05,702/-.
5. The Respondents were issued a Show Cause Notice dated 03.01.2005 raising demand of duty for the period in question. The Show cause notice resulted in confirmation of demand of duty along with interest and imposition of equal amount of penalty.
6. On appeal against the above order, Commissioner (Appeals) set aside the impugned order by observing as under:-
The adjudicating authority has confirmed the demand on the waste and scrap of plastics falling under chapter 39 of the Central Excise Tariff Act, 1985, applying the Note No. 8 (a) of Section XV, whereas this note is applicable only for the goods falling under Chapter 72 to 83 and not on goods of chapter 39.
I find that the issue of liability of Central Excise duty on waste and scrap arising out of dismantling of old and worn out machinery has been decided by the Hon'ble Tribunal in the case of CCE V/s. Vijay Rama Gajapathi Co-operative Sugar Ltd. reported in 2004 (63) RLT 61, whereas it has been held that the said order is impugned before us:-
Manufacture Section 2(f) of Central Excise Act, 1944 waste and scrap arising out of dismantling of old worn out machinery-not arisen out of a process of manufacture-not liable to duty-Revenues appeal Rejected.
It was also held by the Hon'ble Tribunal in the above case of M/s. Vijaya Rama Gajapathi Co-operative Sugar Ltd. that the process of dismantling of machinery is neither incidental nor ancillary to the completion of the manufactured products. Had it been the intention to treat dismantling of old and used machinery as manufacture under Section XV of the schedule, the same would have been obviously specified under Section Note 9, which is restricted to breaking of ships, boat and floating structures only and not dismantling of old and worn out machinery.
In view of the above discussion and findings, I find that the ratio of the above case law is applicable in this case also and therefore, I hold that the impugned goods were not liable to Central Excise duty and the adjudicating authority has confirmed the duty in his impugned order on the wrong premises of the law.
Since the duty is not leviable in this case, invoking of provisions of extended period of limitation or/and imposition of an equal amount of penalty is not sustainable.
7. We find that the issue is no more res-integra and stands settled by various decisions of the Tribunal as detailed below:-
1. Commissioner of Central Excise, Ahmedabad Vs. Tudor India Ltd. 2011 (272) ELT 405 (Tri. Ahmd.)
2. Commissioner of Central Excise, Pondicherry Vs. Tanfac Industries Ltd. 2012 (284) ELT 242 (Tri.- Chennai)
3. M/s. Mumbhi Kasari SSK Ltd. Vs Commissioner of Central Excise & Customs, Pune 2004 (173) ELT 61 (Tri. - Mumbai).
4. M/s. Birla Corporation Ltd. Vs. Commissioner of Central Excise, Bhopal 2009 (236) ELT 476 (Tri.- Del.)
5. M/s. Hindustan Petroleum Corporation Ltd. Vs. Commissioner of Central Excise, Visakhapatnam 2007 (79) RLT 374 (CESTAT-Ban.)
6. Commissioner of Central Exicse, Visakhapatnam 2004 (63) RLT 6 (CESTAT-Ban.).
8. In all these cases it stands held that old waste and scrap generated through breaking of the capital goods or crushing or hammer of the same does not result in emergence of any excisable goods. In the case of Tudor India Ltd. referred supra, the dispute was in respect of plastic scrap generated during the course of separation of rejected old batteries and as such covers the disputed issue completely. As such, we find no merits in the Revenues appeal the same is accordingly rejected.
(Pronounce in the open Court) (Archana Wadhwa) Member (Judicial) (Manmohan Singh) Member (Technical) Jyoti* ??
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