2009 (1) TMI 602 - AT - Central Excise

Summary

Issues:
1. Demand of Central Excise duty on clearances of used plastic and metal drums made by the appellants.
2. Applicability of Customs Notification No. 52/2003-Cus. and Central Excise Notification No. 22/2003-C.E. on the duty liability.
3. Interpretation of Notification No. 23/2003-C.E. regarding computation of duty due on clearances by EOUs in DTA.

Analysis:
1. The appellants, EOUs, filed applications for waiver of pre-deposit of Central Excise duty demanded on clearances of used plastic and metal drums during April 2005 to February 2006. The lower authorities found the impugned goods suitable for repeated use and raised demands based on Notification No. 23/2003-C.E. The appellants argued that duty was not required to be paid for clearances of used and damaged containers under specific notifications.

2. The Tribunal examined the nature of the goods involved, which were used and damaged plastic and metal containers. It was determined that duty on containers procured domestically is leviable only when cleared without use, while duty on imported containers applies if they are suitable for repeated use. The Tribunal noted that the impugned goods were damaged containers, indicating no excise duty liability based on the terms of Notifications 22/03-C.E. and 52/03-Cus. The Tribunal found a prima facie case against the duty demands raised by the original authority and affirmed by the Commissioner (Appeals).

3. In the final decision, the Tribunal ordered a waiver of pre-deposit and stay of recovery of the adjudged dues pending the appeal's decision. The judgment emphasized the applicability of specific notifications in determining duty liability on clearances by EOUs in the Domestic Tariff Area (DTA), providing relief to the appellants regarding the demanded Central Excise duty on the used plastic and metal drums.