2012 (7) TMI 749 - AT - Central Excise

Duty on waste and scrap - appellant is a manufacture and exporter of cycle parts - held that - there is nothing in the Notification No.41/2001-CE(NT) to availment of benefit to waste and scrap under any other Notification. As such by observing that in as much as the assessee was below the ceiling limit subscribed under SSI Notification, it stands held that the benefit of the same would be available to the assessee in respect of waste and scrap. - Decided in favor of assessee.

Summary

Issues:
Interpretation of Notification No.41/2001-CE(NT) regarding liability to discharge duty on waste and scrap arising during manufacturing process. Rejection of appellant's claim for exemption under SSI Notification.

Analysis:

1. The appellant, a manufacturer and exporter of cycle parts, faced a demand raised by the Revenue for duty on waste and scrap arising during the manufacturing process. The Revenue relied on Notification No.41/2001-CE(NT) to assert the liability of the appellant to discharge duty on such waste. The relevant provision in para 4(c) of the said Notification stipulates that any waste arising from the processing of materials may be subject to duty as if it is manufactured or processed in the factory.

2. The lower authorities rejected the appellant's contention that the waste and scrap should be exempted under the Small Scale Industries (SSI) Notification. However, upon considering the submissions from both sides, the Tribunal found that the issue had already been settled in favor of the assessee in a previous case where the Tribunal held that there was no provision in Notification No.41/2001-CE(NT) to deny the benefit of waste and scrap exemption under any other Notification. The Tribunal further emphasized that as the assessee was below the ceiling limit prescribed under the SSI Notification, they were entitled to the benefit of exemption for waste and scrap.

3. Citing the precedent set by the earlier judgment in the case of Amar Wheels P. Ltd., the Tribunal decided to follow the same reasoning and set aside the impugned order confirming the demand duty against the appellant. The Tribunal allowed the appeal filed by the appellant and granted consequential relief in their favor. This decision was made based on the interpretation of the relevant notifications and the principle established in the previous judgment.

4. The Tribunal's decision in this case highlights the importance of interpreting notifications and legal provisions accurately to determine the liability of manufacturers in cases involving waste and scrap arising during the manufacturing process. By aligning with the precedent and considering the specific circumstances of the appellant's case, the Tribunal provided clarity on the issue and granted relief to the appellant based on their entitlement to exemption under the SSI Notification.