2004 (3) TMI 541 - AT - Central Excise

Summary

Issues:
1. Whether scrap generated in a repair center is considered as goods and subject to duty.
2. Whether the activity of repairing defective compressors constitutes manufacturing activity.
3. Whether the demands for duty are barred by time.
4. Classification of waste and scrap of wires and cables as excisable goods.

Issue 1:
The main issue in this case was whether the scrap generated in a repair center should be considered as goods and be subjected to duty. The Commissioner of Central Excise held that the scrap should be considered as goods and the activity as manufacture under Section 2(f) of the Central Excise Act. The appellant argued that the scrap generated, such as burnt copper wires, were not excisable or marketable goods. They relied on various judgments to support their claim. The Tribunal, after considering the citations, held that the generation of scrap like burnt copper wires and burnt enamelled winding wire cannot be considered as goods, in line with previous judgments. The Tribunal also noted that there was no suppression of facts by the appellant, as they had disclosed the activity to the authorities. Therefore, the Tribunal allowed the appellant's appeal.

Issue 2:
Another issue raised was whether the activity of repairing defective compressors constitutes a manufacturing activity. The Commissioner considered this as manufacturing, leading to the generation of dutiable goods. However, the Tribunal disagreed and held that the repair activity does not amount to manufacturing, in line with previous judgments. As a result, the scrap generated during the repair process was not considered as goods subject to duty.

Issue 3:
The question of whether the demands for duty were barred by time was also raised. The appellant argued that the demands were time-barred as the fact of manufacture was known to the authorities. The appellant pointed out previous correspondence where they disclosed the generation of scrap. The Tribunal agreed with the appellant, noting that there was no suppression of facts, and the demands were indeed time-barred.

Issue 4:
The final issue involved the classification of waste and scrap of wires and cables as excisable goods. The Tribunal, after considering various judgments, held that waste and scraps of wires and cables are not excisable goods and are not required to be classified under specific chapters. The Tribunal upheld the appellant's contention and rejected the Revenue's appeal.

In conclusion, the Tribunal ruled in favor of the appellant, allowing their appeal and rejecting the Revenue's appeal. The Tribunal held that the scrap generated during the repair process was not considered as goods subject to duty, and the demands for duty were time-barred. The classification of waste and scrap of wires and cables as excisable goods was also clarified, following previous judgments.