Custom, Excise & Service Tax Tribunal
Ad-Manum Packaging Ltd vs Cce, Indore on 16 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:5.8.2016
Date of Decision:16.08.16
Excise Appeal No.E/2725/2008-EX(DB)
[Arising out of Order-in-Appeal No. IND-I/147/2008 dated 27.08.2008 passed by the Commissioner (Appeals), Customs & Central Excise, Indore ]
For Approval and Signature:
Honble Shri M.V. Ravindran, Member (Judicial)
Honble Shri V. Padmanabhan, Member (Technical)
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?
Ad-Manum Packaging Ltd. Appellants
Vs.
CCE, Indore Respondent
Appearance:
Rep. by Shri Manish Saharan, Advocate for the appellant Rep. by Ms. Neha Garg, DR for the respondent. Coram: Honble Shri M.V. Ravindran, Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) Final Order No.53041/2016 /Dated:16.08.2016 Per M.V. Ravindran:
This appeal is directed against the order-in-appeal No.IND-I/147/2008 dated 27.08.2008.
2. Heard both the sides and perused the records.
3. The issue involved in this case is regarding the demand of central excise duty on the value of scrap retained by the appellant, who is a job worker. The appellant herein is manufacturing HDPE bags on job work basis for one of their customers and discharging the duty liability based upon the cost of raw materials plus job work charges and the profit of margin. As per the understanding between the appellant and their customers, the appellant is entitled to retain the scrap generated during the manufacturing process. It is also undisputed that the appellant clears the scrap so retained by them and discharges the duty liability on it.
4. Revenue seeks to include the value of scrap for discharging the central excise duty on job worked goods.
5. The arguments put-forth by the ld. Departmental Representative and the findings of the lower authorities on this issue are in consistent with the law for more than one reasons.
6. Firstly, the Revenue authorities want to include the value of scrap in the value of the goods job worked i.e. HDPE bags and demand duty. It is undisputed that the appellant has discharged the duty liability on the scrap and again, demanded duty by including the value in job work charges, which will amount to double taxation.
7. Secondly, an identical issue came up before the Bench of the Tribunal in the case of P.R. Rolling Mills Pvt. Ltd. 2010 (249) ELT 232 (Tribunal-Bang.) (in which case one of us, Shri M.V. Ravindran was the Member in that Bench), wherein identical facts were recorded in para 6, which we reproduce 6. We have considered carefully the records of the case. The issue is whether the value of the scrap has to be included in the value of the goods cleared by the appellants to M/s.WIL. The appellant strongly pleaded that the value of scrap cannot be included twice. The main argument was that while estimating the value of the products manufactured by the appellant on job work basis, the value of the entire raw material received has been taken into account. It was also pleaded that the scrap separately has been cleared on payment of duty, hence, there was no need for including the value of the scrap in the assessable value again. It was stated that this would amount to addition of the value of the scrap twice. A decision of this Bench in the case of Consolidated Engg. (supra) has also been relied on.
8. After considering the decision of the Tribunal in the case of Lawkim Ltd. & Ors. and various other decisions, the Tribunal in paragraph-6.2 reproduced the ratio as in the case of International Auto Ltd. and held that adding the value of scrap to the value of the job worked goods is incorrect. This decision of the Tribunal was challenged by the Revenue in civil appeal before the Apex Court and the Apex Court on 6.9.2010 dismissed the appeal on the grounds of delay as well as on merit. This dismissal by the Apex Court is reported at 2010 (260) ELT A-84. .
9. In view of the foregoing, we find that the case laws relied upon by the lower authorities and the Departmental Representative will not carry their case any further.
10. In the facts and circumstances of this case, we hold that the impugned order is unsustainable and is accordingly set aside. The impugned is set aside and the appeal is allowed with consequential relief.
[Order pronounced on 16.08.2016 ] ( M.V. Ravindran ) Member (Judicial) ( V.Padmanabhan ) Member (Technical) Ckp.
1