Custom, Excise & Service Tax Tribunal
M/S. Poddar Tyres Ltd vs C.C.E., Ludhiana on 20 November, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 20.11.2013
For Approval &Signature :
Honble Mrs. Archana Wadhwa, Member (Judicial)
Honble Mr. Rakesh Kumar, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. E/3775/2005 -EX[DB]
[Arising out of Order-in-Appeal No.303/CE/Appl/Ldh/05, dated 23.09.2005 passed by the C.C.E.(Appeals), Ludhiana]
M/s. Poddar Tyres Ltd. Appellant
Vs.
C.C.E., Ludhiana Respondent
Appearance Mr. Vickrant Kackria, Advocate - for the appellant Mr. V.P. Batra, DR - for the respondent CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. Rakesh Kumar, Member (Technical) Final Order No.58443, dated 20.11.2013 Per Honble Mrs. Archana Wadhwa :
After hearing both the sides, we find that the appellant is engaged in the manufacture of tubes and tyres. During the course of manufacture of the said final products, various types of waste and scrap arise. Originally demand to the extent of Rs.43 lakhs was raised against the appellants. However, the original adjudicating authority dropped the demand amount of Rs.42 lakhs and confirmed the balance. On appeal against the order, Commissioner (Appeals) further dropped the demand in respect of certain items of waste and scraps but upheld the demand of Rs.84,000/- in respect of the following items:-
(a) Rubber air bag Nipple Scrap
(b) Bead wire scrap
(c) Chippi scrap
(d) Nipple scrap (e) Hard scrap No.1, 2 & 3
2. Ld. Advocate draws our attention to the Hon'ble Delhi High Court decision in the case of Modi Rubber Ltd. Vs. Union of India reported in 1987 (29) E.L.T. 502 (Delhi) laying down that the waste and scrap obtained during the course of manufacture of tubes and tyres cannot be held to be excisable even though they may fetch some price in the open market. This decision stands followed in the case of Collector of Central Excise Vs. Dunlop India Ltd. reported in 1988 (36) E.L.T. 329 (Tribunal). He also assails the impugned order on the point of limitation by submitting that the demand for the period 1999 to 2002 was raised on 03.08.2004.
3. Countering the arguments, Ld. Departmental Representative submits that admittedly the waste and scrap arise during the course of manufacture of tubes and tyres and has some price in the market. The decisions relied upon by the Ld. Advocate pertain to the erstwhile tariff and are not applicable to the present tariff. As regards limitation, he submits that the Commissioner (Appeals) has discussed the same by observing that the appellant has not disclosed the fact and clearance of waste and scrap to the Revenue and as such there was suppression on their part, justifying invocation of longer period of limitation. In his rejoinder, Ld. Advocate submits that the demand stands raised against them as a result of audit objection conducted in the year 2004. For the period prior to the said period, various audits have been conducted and no objection was ever raised. This led to bona fide belief on the part of the assessee that such waste and scrap arising during the course of their final products cannot be held to be dutiable.
4. Without going into the merits of the case, we find that the demand admittedly stands raised by invoking the longer period of limitation. In the light of various decisions as discussed above, there could be a bona fide belief on the part of the appellant as regards the excisablity of such waste and scrap. Otherwise also, we find favour with the appellants submissions that the audits conducted prior to the present audit did not raise any objections. As such, on the point of limitation, we are of the view that the impugned order is liable to be set aside. Accordingly, we allow the appeal with the consequential relief to the appellant.
(Dictated and pronounced in the Open Court) (Archana Wadhwa) Member (Judicial) (Rakesh Kumar) Member (Technical) SSK -3-