2006 (2) TMI 566 - AT - Central Excise

Summary

Issues:
1. Reversal of value of clearance under Rule 6(3)(b) of Cenvat Credit Rules, 2002 for Non-Granuled Slag.
2. Contention of marketability of slag.
3. Contradictory proceedings initiated by Revenue.
4. Pre-deposit requirement and waiver under relevant judgments.

Analysis:

1. The appellants were directed to reverse 8% of the value of clearance under Rule 6(3)(b) of the Cenvat Credit Rules, 2002, for Non-Granuled Slag arising from the manufacturing process of HR pipes. The appellant argued that this slag is not marketable, as supported by an Order-in-Original, which was not upheld by the Revenue. The appellant cited various judgments to support their claim.

2. The Revenue contended that the slag is being sold and hence is dutiable. The appellant argued that anything sold cannot be automatically considered a marketable commodity, referencing the case of Moti Laminates P. Ltd. v. CCE. The Tribunal noted the contradictory proceedings initiated by the Revenue on the issue.

3. Upon careful consideration, the Tribunal observed that the Revenue had not appealed against the Orders-in-Original mentioned earlier. Citing the case of Mehsana District Co-Operative Milk Producers Union Ltd. v. U.O.I., the Tribunal held that if an order is unsustainable and the issue is covered by a higher forum's judgment, no pre-deposit is required. Consequently, the Tribunal granted full waiver of pre-deposit and directed the appeal to be disposed of within 180 days.

4. The Tribunal allowed the stay application, granting a full waiver of the pre-deposit amount. This decision was made in accordance with Section 35F of the Act. The appeal was scheduled for a hearing on 10th April 2006, emphasizing the need for timely resolution in compliance with the waiver granted.