2007 (10) TMI 528 - AT - Central Excise

Summary

Issues:

1. Applicability of Notification No. 38/90 dated 20-2-1990 on waste and scrap of corrugated boxes.
2. Liability of the respondent to clear waste and scrap of corrugated boxes.
3. Interpretation of Rule 57D in relation to waste and scrap of corrugated boxes.

Analysis:

Issue 1: The main issue in the present appeal is the applicability of Notification No. 38/90 dated 20-2-1990 on the waste and scrap of corrugated boxes. The Revenue initiated proceedings against the respondent proposing a demand of duty on the waste and scrap cleared by them, arguing that it was not covered by the said notification. The Commissioner (Appeals) had confirmed a duty demand of Rs. 7,370/- along with a personal penalty of Rs. 1,000/-. However, the appellate tribunal found that the waste and scrap were essentially inputs scrap, not manufactured by the respondent, and therefore, there was no liability to clear it by paying duty. The tribunal also noted that the respondent had followed this practice both before and after the period in question, with no demands raised previously.

Issue 2: Regarding the liability of the respondent to clear the waste and scrap of corrugated boxes, it was established that the respondent was not the manufacturer of the corrugated boxes or the waste and scrap arising from them. The waste and scrap were classified as inputs scrap, and as such, the respondent was not obligated to clear it by paying duty. The tribunal acknowledged that the respondent had claimed the benefit of the notification and had received approval from the proper officer for the classification, further supporting their position.

Issue 3: The interpretation of Rule 57D in relation to the waste and scrap of corrugated boxes was also crucial. The appellate authority correctly observed that such waste and scrap would fall under the provisions of Rule 57D, which meant that no demand needed to be raised against the respondent. The tribunal found no fault in the appellate authority's decision and rejected the Revenue's appeal, affirming that the waste and scrap of corrugated boxes were not subject to duty payment based on the specific circumstances and legal provisions involved.

In conclusion, the tribunal upheld the decision in favor of the respondent, emphasizing that the waste and scrap in question were not liable for duty payment, as they were essentially inputs scrap rather than manufactured products, and were covered by the provisions of Rule 57D.