2011 (1) TMI 410 - AT - Central Excise

Classification - Demand - auction took place for iron and steel scrap arising out of temporary decks and helidecks - it is clear that the activity of cutting and dismantling of the impugned structures has been carried out by the appellant only and same has been done after the sale was completed - As the scrap of iron and steel generated by breaking up of floating structures and helidecks is classifiable under Heading 72.30, duty cannot be demanded under Heading 89.08 - ONGC is not a manufacturer of scrap of iron and steel by breaking up the impugned structures, no duty can be demanded from ONGC - It is pertinent to mention here that in the show-cause notice no proposal of demand of duty has been made against the appellant - Appeal is allowed

Summary

Issues:
1. Locus standi of the appellant to file appeal before the Tribunal.
2. Classification dispute regarding iron and steel scrap arising from temporary decks and helidecks.
3. Liability of Central Excise duty on the scrap generated from cutting and dismantling activities.
4. Applicability of SSI exemption to the appellant.
5. Correct classification of the scrap under the Central Excise Tariff Act.
6. Liability of ONGC for Central Excise duty on the goods sold to the appellant.

Analysis:
1. The appellant filed an appeal challenging the dismissal of their appeal by the Tribunal on the grounds of locus standi. The High Court held the appellant to be an 'aggrieved person,' leading to the matter being reconsidered by the Tribunal on merits.

2. The dispute arose from the classification of iron and steel scrap purchased by the appellant at a public auction. The appellant argued that the correct classification was under Heading 72.30, obtained by breaking up of floating structures, rather than Heading 89.08 as contended by the department.

3. The appellant undertook cutting and dismantling activities on the purchased decks, leading to a demand for Central Excise duty. The Tribunal ruled that as ONGC did not engage in manufacturing activities, they were not liable for duty. The appellant was also not liable as no show-cause notice was issued against them.

4. The appellant claimed entitlement to SSI exemption, asserting no duty was payable on the waste and scrap purchased. However, the Tribunal's decision focused on the correct classification of the goods rather than the exemption claim.

5. The Tribunal determined that the scrap of iron and steel, arising from breaking up floating structures, should be classified under Heading 72.30 of the Central Excise Tariff Act, leading to the dismissal of the duty demand under Heading 89.08.

6. ONGC's liability for Central Excise duty was contested, with the Tribunal concluding that as ONGC did not engage in manufacturing the scrap, they were not liable for duty. The orders demanding duty from ONGC were set aside, providing consequential relief to the appellant.