2002 (10) TMI 625 - AT - Central Excise

Summary

Issues:
1. Duty liability on paper waste and bleach liquor under Central Excise Tariff.
2. Exemption claims under various Notifications.
3. Duty liability on wrapping paper and CENVAT credit.
4. Confirmation of demands and imposition of personal penalties.

Issue 1: Duty liability on paper waste and bleach liquor under Central Excise Tariff
The appellants, engaged in paper manufacturing, were issued a show cause notice alleging duty demands for periods in 2000. They denied the allegations, arguing that bleach liquor and paper waste were not marketable commodities and thus not excisable goods. They cited precedents and Supreme Court decisions to support their stance. The Tribunal noted that paper waste, known as "broke," is recycled in the manufacturing process and not sold in the market. The Commissioner's order demanding duty on paper waste was challenged, citing Circular No. 61/5/2001-CX 4, which exempts waste paper used in manufacturing. The Tribunal held that no duty could be demanded on paper waste based on legal precedents and the circular.

Issue 2: Exemption claims under various Notifications
The appellants also contested duty demands on bleach liquor, arguing its short shelf-life made it non-marketable. They claimed the bleach liquor was consumed internally within 24 hours and not sold. The Commissioner, however, considered bleach liquor excisable based on tariff classification and exemption notifications. The Tribunal found that the Revenue failed to prove marketability of the appellants' bleach liquor, remanding the matter for further examination by the Commissioner.

Issue 3: Duty liability on wrapping paper and CENVAT credit
In the case of M/s. Kanoi Paper & Industries Ltd., duty demands on wrapping paper were confirmed by the Commissioner. The appellants agreed to pay the duty but sought CENVAT credit for inputs used in manufacturing wrapping paper. The Commissioner's order did not address this aspect. The Tribunal ruled that the appellants were entitled to credit for inputs used in wrapping paper production upon providing documentary evidence of duty payment, receipt, and utilization.

Issue 4: Confirmation of demands and imposition of personal penalties
After considering the submissions, the Commissioner confirmed duty demands and imposed personal penalties on the appellants. The Tribunal found no justification for the penalties, considering the disputes as bona fide legal issues without evidence of malice. Consequently, the penalties were set aside. All three appeals were disposed of accordingly.

This comprehensive analysis covers the duty liabilities on paper waste and bleach liquor, exemption claims under various notifications, duty demands on wrapping paper and CENVAT credit, as well as the confirmation of demands and the imposition of personal penalties in the legal judgment by the Appellate Tribunal CEGAT, Kolkata.