2006 (3) TMI 495 - AT - Central Excise

Summary

Issues: Classification of scrap conveyor belts for central excise duty

Detailed Analysis:

1. The issue in this case revolves around the classification of scrap conveyor belts for the purpose of central excise duty. The appellant, a manufacturer of iron and steel products, had excise duty demanded on the scrap of conveyor belts under sub-heading 4004.00 of the Central Excise Tariff. The appellant contended that only products manufactured from rubber should be classified under Chapter heading 40 and that scrap of conveyor belts, not being a manufactured item, should not be liable to central excise duty.

2. The appellant's argument was supported by referencing the decision of the Tribunal in the case of Mysore Cements Ltd. v. C.E., Bangalore, which held relevance to the issue at hand. Additionally, the appellant relied on a judgment of the Hon'ble Supreme Court in the case of C.C.E., Patna v. Tata Iron & Steel Co. Ltd., emphasizing that not every scraped item, even if sold for a price, is necessarily subject to excise duty.

3. It was established that only goods resulting from manufacture attract central excise duty, and this principle was not altered by Note 6 to Chapter 40, which pertains to waste items arising from the manufacture of rubber products. The Tribunal's decision in the case of Mysore Cement Ltd. further supported the appellant's position, reinforcing that scrap conveyor belts should not be subjected to central excise duty.

4. Ultimately, the Tribunal allowed the appeal, setting aside the impugned order demanding excise duty on the scrap conveyor belts. The appellant was granted entitlement to consequential relief, if any, as a result of the decision in their favor. The judgment was dictated and pronounced in open court, bringing the matter to a favorable conclusion for the appellant in this case.