2013 (2) TMI 705 - AT - Central Excise

Waste and scrap - dutiability - waste and scrap generated and retained by job-worker - Held that - Tribunal in the case of Rocket Engineering Corpn. Ltd. 2005 (6) TMI 184 - CESTAT, MUMBAI has held that waste and scrap generated at job workers end subsequent to 1-4-2000 is not dutiable in the hands of principal manufacturer - as the issue stand covered by the decision of the Tribunal and the period involved is subsequent to 1-4-2000, following the judgement, the demand is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Dutiability of waste and scrap generated by a job worker retained by the principal manufacturer post-1-4-2000.

Analysis:
The dispute in the present appeal revolves around the dutiability of waste and scrap generated by a job worker, which was retained by the principal manufacturer. The Tribunal, in the case of Rocket Engineering Corpn. Ltd., held that waste and scrap generated at the job worker's end after 1-4-2000 is not dutiable for the principal manufacturer. This decision was upheld by the Bombay High Court in CCE v. Rocket Engineering Corpn. Ltd. It was established in this case that no duty liability exists for the principal manufacturer post-31-3-2000 regarding scrap generated at the job worker's end. Subsequently, the Tribunal, in cases like Emco Ltd. v. CCE, Mumbai-III and Preetam Enterprises v. CCE, Pune-II, reiterated that duty liability cannot be imposed on the principal manufacturer for waste and scrap generated by the job worker.

The learned DR pointed out the Tribunal's decision in the case of Mahindra Ugine Steel Co. Ltd., which contradicted the above decisions. However, it was noted that the period of dispute in the Mahindra Ugine Steel case was from December 1991 to August 1996, predating the complete removal of Rule 57AC from the statute book on 1-4-2000. Given that the issue at hand is covered by the earlier decisions of the Tribunal and pertains to a period post-1-4-2000, the impugned order was set aside, and the appeal was allowed in favor of the appellant with consequential relief.

In conclusion, the judgment clarifies that waste and scrap generated by a job worker after 1-4-2000 is not dutiable for the principal manufacturer based on established precedents and the absence of duty liability post the specified date.