Customs, Excise and Gold Tribunal - Bangalore
Zuari Cement Limited (Zcl) vs Commissioner Of Cus. And C. Ex. on 18 October, 2006
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 4/2004, dated 15-6-2004 by which the Commissioner has confirmed demands with regard to the scrap removed by the appellants. During the plant expansion, scrap was generated while erection, fabrication and commissioning of various machinery equipments. The Commissioner has held these scrap to be excisable and has confirmed demands and has also imposed penalties. The appellant's contention is that this scrap is not dutiable, as the scrap is not generated during the course of manufacture of goods in terms of definition of scrap under Section XV of Central Excise Tariff Act. This scrap has not been generated as a result of mechanical working of metals as defined in the said Section XV.
2. The learned Counsel submits that in an identical case, this Bench in the case of India Cements Ltd. v. CCE, Guntur by Final Order No. 1138/2006 dated 3-7-2006 has noted that only "metal wastes and scrap from the manufacture or mechanical working of metals and metal goods definitely not useable as such because of breakage, cutting up, wear or other reasons" alone would be dutiable and not other scraps. The Tribunal in the said order has relied on four rulings (i) CCE v. Birla Corporation Ltd. (ii) Rajasthan Spinning and Weaving Mills Ltd. (iii) Southern Agrifurane Industries Ltd. v. CCE Chennai and (iv) Ballarpur Industries Ltd. v. CCE, New Delhi . He also placed before us the ruling of Delhi Bench on an identical issue wherein scrap has been held to be not dutiable in the case of Gujarat Ambuja Cements Ltd. v. CCE, Rajkot ; Hindustan Petroleum Corporation Ltd. v. CCE, Vishakapatnam ; and Larsen & Toubro Ltd. v. CCE, Rajkot 2004 (173) E.L.T. 515 (Tri.-Mumbai).
3. The learned JDR reiterated the departmental views.
4. On a careful consideration, we notice that the scrap has not generated from the mechanical working of metals, as we find in Section XV of the Central Excise Tariff Act. The similar scraps which have generated during the construction of various civil structures has to be held not dutiable. Respectfully, following the ratio of the above noted judgments, the impugned order is set aside and the appeals are allowed with consequential relief.
(Operative portion of this order was pronounced in open Court on conclusion of hearing)