2002 (5) TMI 625 - AT - Central Excise

Summary

Issues:
Appeal against duty demand on waste of plastic, imposition of penalty for failure to pay duty, and imposition of penalties on employees.

Analysis:
1. The manufacturer contended that plastic waste should be treated as partially processed goods, not scrap, under Rule 57F(3). Cited decisions of Larger Bench and Chennai Bench supporting this view.
2. Departmental representative emphasized Chennai Bench decisions contrary to the manufacturer's argument.
3. The Larger Bench majority held that waste must be material not technologically feasible for further use in manufacturing. Rule 57F(2) allows movement of such goods without duty payment.
4. Chennai Bench decisions wrongly limited the Larger Bench's decision to metal waste only, which was not supported by the Larger Bench's reasoning.
5. The definition of waste in Rule 57F(4) is not limited to metals, as argued by the Chennai Bench.
6. The Larger Bench decision needs reconsideration regarding the classification of waste and partially processed goods under Rule 57F(3).
7. The duty demand invoking extended period was unjustified as the manufacturer had disclosed information about the goods and their classification.
8. Previous Tribunal decisions supported treating such goods as partially processed, not waste, until a 1996 reference to the Larger Bench.
9. Due to lack of suppression and disclosure of information by the manufacturer, the extended period of limitation did not apply, rendering the demand barred by limitation.
10. The appeals were allowed, and the impugned order was set aside, providing consequential relief to the appellant.