2013 (1) TMI 221 - AT - Central Excise

Excise duty liability on waste & scrap arising out of the capital goods - Held that - Persuing the annexures 1 to 6 attached to the appeal memoranda it is found that that scrap which was cleared was of various different categories like used empty oil cans/drums, electric wires, plastic bags etc. and did not include any items of a capital goods thus the issue needs to be appreciated by the adjudicating authority again as adjudicating authority has not considered the details given in annexure 1 to 6 given to him during the course of personal hearing.

Summary

Issues:
1. Waiver of pre-deposit of duty along with penalty and interest.
2. Central excise duty liability on waste & scrap cleared by the appellant.
3. Consideration of evidence and annexures by the adjudicating authority.
4. Interpretation of Rule 3(5A) of the Central Excise Rules, 2004.
5. Applicability of previous tribunal decisions.
6. Duty liability on waste & scrap of capital goods.
7. Principles of natural justice in reconsideration of the issue.

Analysis:
1. The appellant filed a stay petition seeking waiver of pre-deposit of duty amounting to Rs.2,37,90,967/- along with penalty and interest. The adjudicating authority confirmed this duty liability on waste & scrap cleared by the appellant. The Tribunal found that the appeal could be disposed of after considering the waiver application.

2. The appellant argued that the duty demand was based on the clearance of waste & scrap arising from capital goods under Rule 3(5A) of the Central Excise Rules, 2004. They presented annexures to demonstrate that the cleared scrap was of various categories and did not include items sold as waste & scrap of capital goods. The Tribunal noted that the adjudicating authority did not properly consider these annexures, leading to a decision in favor of the appellant for reconsideration.

3. The issue revolved around whether duty liability arises on waste & scrap cleared by the appellant. The Tribunal emphasized the need for the adjudicating authority to reevaluate the details provided in the annexures during the personal hearing. The Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority for a fresh consideration, directing the appellants to cooperate and present evidence.

4. The appellant cited previous tribunal decisions in support of their case, arguing that the issue was covered by those decisions. The Tribunal acknowledged these references but focused on the specific evidence and details provided by the appellant in this case.

5. The Tribunal highlighted the importance of following the principles of natural justice in reconsidering the issue. They refrained from expressing any opinion on the merits of the case but emphasized the need for a thorough reevaluation by the adjudicating authority.

6. Ultimately, the stay petition and appeal were disposed of by way of remand, indicating a procedural step for the adjudicating authority to reassess the duty liability issue in light of the evidence and principles discussed during the proceedings.