2009 (3) TMI 761 - AT - Central Excise

Summary

Issues Involved: Appeal filed by Revenue regarding clearance of empty drums/barrels without payment of Central Excise duty.

Summary:

Issue 1: Clearance of empty drums/barrels without payment of duty
The respondents, manufacturers of Gas Compressors, cleared empty drums/barrels without paying Central Excise duty. The adjudicating authority demanded duty on the cleared empty drums/barrels, considering them as scrap/waste. The Commissioner (Appeals) allowed the appeal filed by the respondents.

Details:
The Revenue filed an appeal citing that a similar issue was addressed by CEGAT in the case of West Coast Industrial Gases Ltd. v. CCE, Cochin, where it was held that such empty drums/containers can be considered scrap and duty can be demanded on them. However, the order was later recalled, and an appeal against it is pending with the Supreme Court. The Revenue also mentioned the case of Southern Refineries, where the Hon'ble Supreme Court admitted a Civil Appeal. The Tribunal, in the case of Southern Refineries Ltd. v. Commissioner, held that manufacturers were entitled to remove metal drums as scrap without payment of duty under the relevant sub-heading. The Supreme Court dismissed the Revenue's appeal against this order, stating that no duty could be demanded on containers used for packing inputs when cleared from the factory. The Board clarified that no duty is payable on waste containers used for packing inputs when cleared from the factory of the manufacturer availing Modvat/Cenvat credit. Considering these developments, the appeal filed by the Revenue was dismissed, upholding the Commissioner (Appeals) order.

Conclusion:
The subsequent decisions and clarifications from the Supreme Court and the Board led to the dismissal of the Revenue's appeal, affirming the decision of the Commissioner (Appeals) regarding the clearance of empty drums/barrels without payment of Central Excise duty.