Custom, Excise & Service Tax Tribunal
(Arising Out Of Order-In-Appeal No. ... vs M/S Indo Rama Synthetics (I) Ltd on 7 March, 2012
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II
IN APPEAL NO. E/106/10 & E/1010/09-MUM
(Arising out of Order-in-Appeal No. SR/251/NGP/2009 dated 06.11.2009 and SR/169/NGP/2009 dated 28.07.2009 and passed by the Commissioner of Customs & Central Excise (Appeals), Nagpur.)
For approval and signature: Shri Sahab Singh, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see : No 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 : yes CESTAT (Procedure) Rules, 1982 for Publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen yes of the order?
4. Whether Order is to be circulated to the Departmental : yes authorities?
CCE, Nagpur (E/106/10)
M/s Indo Rama Synthetics (I) Ltd. (E/1010/09)
: Appellant
Versus
M/s Indo Rama Synthetics (I) Ltd.
CCE, Nagpur
: Respondent
Appearance Shri Bharat Raichandani, Advocate : For Appellant Shri A.K. Prabhakar, Superintendent (A.R.) : For Respondents CORAM:
Shri Sahab Singh, Honble Member (Technical) Date of Hearing :
07.03.2012 Date of Decision:
07.03.2012 ORDER NO. ............................................
Per: Sahab Singh These are two appeals 1st appeal filed by the Revenue and 2nd appeal filed by the appellant M/s Indo Rama Synthetics (I) Ltd. against the Order-in-Appeal No. SR/251/NGP/2009 dated 06.11.2009 and SR/169/NGP/2009 dated 28.07.2009. As issue involved is same, these appeals are being taken together.
2. The brief facts of the case are that M/s Indo Rama Synthetics (I) Ltd. (hereinafter referred to as assessee) are manufacturer of yarn. During the course of manufacture, they used inputs in corrugated boxes/plastic bags. After using the inputs, the assessee has cleared these corrugated boxes/plastic bags i.e. packing materials of goods as scrap without payment of duty. The assessee was also procuring paper tube/bobbins, kraft paper, plain paper etc. on payment of duty for proper packing of the yarn only for the purpose of transferring same to other division for further processing. During the course of processing, these paper tubes/bobbins etc. were used for proper handling of the goods, which ultimately became waste. These wastes were also being cleared by them without payment of duty. Therefore, the duty was demanded on all the following scarp:-
i) Mixed plastic scrap,
ii) Used paper tube scrap,
iii) Mixed kachra and
iv) Paper waste scrap.
Two show-cause notices were issued to the assessee vide show-cause notices dated 01.07.2008 and 02.12.2008. The 1st show-cause notice dated 1st July, 2008 was dropped by the Assistant Commissioner of Central Excise and 2nd show-cause notice dated 02.12.2008 was confirmed by the adjudicating authority.
3. Against the confirmed demand assessee filed an appeal before Commissioner (Appeals) who vide Order-in-Appeal No. SR/251/NGP/2009 dated 06.11.2009 has allowed the appeal. Revenue is in appeal against this Order-in-Appeal. Against dropping of demand by the original authority, Revenue filed an appeal before Commissioner (Appeals) who vide order No. SR/169/NGP/2009 dated 28.07.2009 allowed the appeal against which assessee is in appeal before this Tribunal.
4. Learned Counsel appearing for the assessee submitted that the waste of packing material, used in packing of yarn is not manufactured by them and accordingly no duty is required to be paid by them. He referred to Board Circular No. 721/37/2003-CX dated 6th June 2003 under which it was clarified that no duty would be demanded on the containers used for packing of goods, on which the credit has been taken, when cleared from the factory of the manufacture, as these containers could not be treated as scrap or waste arising out of the manufacturing process. This Circular was issued by Board after decision of the Hon'ble Supreme Court in the case of M/s West Coast Industrial Gases Ltd. vs. Commissioner of Central Excise reported in 2003 (155) ELT 11 (SC). Learned Counsel further submitted that Hon'ble Gujarat High Court in the case of CCE vs. Gulf Oil India Ltd. reported in 2011 (264) ELT 382 (Guj.) also relying on Hon'ble Supreme Court decision has held that plastic containers for filling lubricants when damaged during process of packing of lubricants, become unusable and disposed of as waste/scrap and it was held that no reversal was required on such waste containers.
5. Learned Authorised Representative appearing for the Revenue submitted that the wastes of packing materials such as paper tubes/bobbins, corrugated papaer/boxes and kraft paper have been sold by the assessee on a commercial price and therefore, the duty is required to be paid on these materials.
6. After hearing both the sides, I find that the common issue involved in both the appeals is whether duty is required to be paid on four types of waste. Two show-cause notices were issued to the assessee for different period. I find that the adjudicating authority in his Order-in-Original dated 30.01.2009 has dropped the proceeding whereas the same Assistant Commissioner in his Order-in-Original dated 25.03.2009 has confirmed the demand against the assessee. When the assessee and the Revenue filed the appeal before Commissioner (Appeals), the Commissioner (Appeals) vide Order-in-Appeal No. SR/251/NGP/2009 dated 06.11.2009 has allowed the appeal of assessee which means that no duty is payable by assessee. However, the same Commissioner (Appeals) in his Order-in-Appeal No. SR/169/NGP/2009 dated 28.07.2009 has allowed the Revenue appeal which means that duty is payable on these wastes.
7. I find both the Assistant Commissioner as well as Commissioner (Appeals) have taken the opposite views on same matter and they were not consistent in their stand in different proceedings. I also find that the Board Circular has clarified the matter with regards to duty on the containers holding that the no duty will be demanded on the containers waste in view of Hon'ble Supreme Court decision in the case of M/s West Coast Industrial Gases Ltd. (supra) and the Hon'ble Gujarat High Court in the case of Gulf Oil India Ltd. (supra) also relied on the same decision of the Hon'ble Supreme Court (supra).
8. I therefore, remand the matter back to the Original adjudicating authority for deciding the matter afresh in the light of the above decisions and any other decision cited by the both sides after giving an opportunity of personal hearing to the assessee.
9. Appeal is allowed by way of remand.
(Dictated in Court)
(Sahab Singh) Member (Technical)
Sp/
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