2004 (11) TMI 361 - AT - Central Excise

Summary

Issues:
1. Whether the duty payable on waste generated by a job worker should be paid by the principal manufacturer or the job worker.
2. Whether the value of impregnated filter paper received from a job worker should be included in the aggregate value of clearances for determining SSI benefit eligibility.

Issue No. 1:
The case involved the clearance of waste/scrap generated by a job worker at a duty rate applicable to him, which the Revenue demanded from the principal manufacturer. The dispute centered around the interpretation of Rule 57F(5)(ii) regarding the payment of excise duty on waste. The Revenue argued that the duty should be paid by the appellant, while the appellant cited a CBEC Circular stating the job worker should be considered the actual manufacturer. The Tribunal held that the duty rate applicable to the job worker should be adopted for waste clearance, rejecting the Revenue's demand for differential duty from the appellant.

Issue No. 2:
The second issue revolved around whether the value of impregnated filter paper received from a job worker should be included in the principal manufacturer's clearances for SSI benefit calculation. The appellants sent base filter paper for impregnation and argued that the impregnated filter paper should not be considered in the aggregate value of clearances as per a Board's Circular. However, the Commissioner (Appeals) disagreed, stating that the impregnated filter papers are intermediate products necessary for final product manufacture. The Tribunal upheld the Commissioner's decision but remanded the matter for re-computation of duty liability as the differential duty calculation was disputed by the appellants.

In conclusion, the Tribunal ruled in favor of the appellant regarding the first issue, setting aside the demand for differential duty on waste clearance. For the second issue, the Tribunal upheld the Commissioner's decision on the inclusion of impregnated filter paper value in clearances but remanded the case for re-computation of duty liability based on the appellants' argument regarding differential duty calculation.