2008 (7) TMI 677 - AT - Central Excise

Waste and scrap - Dutiability - Held that - the Revenue is not able to provide evidence regarding the classification of the waste MEG under 3950.90, in the category of plastic goods. In the absence of any evidence, that the product used MEG merits classification under 3950.90, we are of the considered view that the findings arrived by the Commissioner (A) are correct - duty cannot be imposed - appeal dismissed - decided against Revenue.

Summary

Issues:
Dutiability of waste products arising during the manufacture of yarn.

Analysis:
The appeal dealt with the dutiability of waste products generated during the yarn manufacturing process. The waste product in question was a mixture of various components, including unreacted DMT oligomers, moisture, Methanal, color impurities, and DEG. The adjudicating authority had classified this waste product under CSH 3915.90, demanding duty from the respondent. However, the ld. Commissioner (Appeals) set aside the order-in-original, highlighting the confusion in the facts and issues presented. The Commissioner noted that the department failed to provide evidence supporting the classification of the waste product under an alternate category such as 3950.90 for plastic goods. The Commissioner found the department's classification erroneous and unsupported, leading to the dismissal of the duty demand and penalty imposition. The Commissioner also emphasized that the department's lack of confidence in its own classification stance further weakened the case against the respondent.

The grounds of appeal presented by the department challenged the Commissioner's decision, arguing that the used Mono Ethylene Glycol (MEG) was a marketable and excisable commodity, thus implying dutiability. The department contended that if the used MEG was not classifiable under CSH 3915 as suggested in the Order-in-Original, the Commissioner should have reclassified it appropriately. However, the department's appeal lacked evidence supporting the classification of the waste MEG under CSH 3950.90 for plastic goods. The Tribunal, after considering the grounds of appeal and the lack of substantiating evidence, upheld the Commissioner (Appeals)'s decision. The Tribunal found that the Commissioner's findings were correct and devoid of any flaws, leading to the dismissal of the Revenue's appeal and the disposal of the Cross-objection supporting the impugned order.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the Commissioner (Appeals)'s decision regarding the dutiability of the waste product arising during the yarn manufacturing process. The lack of evidence supporting an alternate classification under CSH 3950.90 for plastic goods weakened the Revenue's case, leading to the rejection of the appeal and the disposal of the Cross-objection.