2005 (6) TMI 355 - AT - Central Excise

Summary

Issues:
Whether waste and scrap generated in a factory can be cleared to a job worker for conversion without duty payment in accordance with Notification No. 214/68-C.E.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Mumbai, addressed the issue of whether appellants can clear waste and scrap to a job worker for conversion without paying duty as per Notification No. 214/68-C.E. The Tribunal noted that the issue was covered by a Larger Bench decision in the case of Wyeth Laboratories Ltd. v. Collector of Central Excise, Mumbai. The Tribunal emphasized that waste and scrap can be cleared to a job worker for further conversion without the obligation of duty payment. The Tribunal criticized the lower authorities for adopting a minority view instead of following the law laid down by the Larger Bench. It stressed that judicial propriety required adherence to majority decisions to settle disputed issues and avoid unnecessary litigation escalation.

The Tribunal, in line with the law declared by the Larger Bench, set aside the Commissioner's order and allowed the appeal, providing consequential relief to the appellant. The Tribunal's decision also led to the disposal of the stay petition. By upholding the principle established by the Larger Bench, the Tribunal ensured that the appellant was not unfairly burdened with duty payment for clearing waste and scrap to a job worker for conversion into ingots. The judgment highlighted the importance of lower authorities following precedent set by higher judicial bodies to maintain consistency and avoid unnecessary legal disputes. The decision ultimately favored the appellant, providing clarity on the duty implications of clearing waste and scrap for conversion purposes.