2008 (12) TMI 629 - AT - Central Excise

SSI Exemption - Waste and scrap arising in course of manufacture of cycle parts exported and for which rebate granted in terms of Notification No. 41//2001-C.E. (N.T.)

Summary

Issues:
Interpretation of Notification No. 41/2001-C.E. (N.T.) regarding duty on waste and scrap arising in the course of manufacture of cycle parts exported and SSI exemption availability.

Analysis:
The appeal dealt with the Revenue's disagreement with the Commissioner (Appeals) regarding the liability to pay duty on waste and scrap generated during the manufacture of cycle parts exported by the assessees. The Commissioner had ruled in favor of the assessees, citing the availability of Small Scale Industries (SSI) exemption due to their sales being below the prescribed ceiling limit for the relevant years. The disputed periods were specified for each appeal.

Upon hearing both sides, the Tribunal examined clause 4(c) of Notification No. 41/2001-C.E. (N.T.), which required waste arising from processing to be cleared on payment of duty. The Revenue argued that duty was mandatory for waste clearance. However, the Tribunal found no restriction in the said notification preventing the assessees from benefiting from other exemptions. It was noted that the assessees' clearances were within the SSI exemption limit, and they were entitled to the benefit of Notification No. 89/95-C.E., exempting duty on waste and scrap from the manufacture of exempted goods like cycle parts exported by them.

Consequently, the Tribunal upheld the Commissioner's orders, stating that no error warranted interference. The appeals were therefore rejected, and the cross-objections were disposed of accordingly. The judgment was dictated and pronounced in open court on December 29, 2008, by Ms. Jyoti Balasundaram and Shri M. Veeraiyan, JJ.