2013 (6) TMI 583 - AT - Central Excise

Removal of damaged aluminium tubes - duty on waste and scrap - Held that - As is apparent, while the show-cause notice demands duty on the assumption by Revenue that the assessee had cleared damaged aluminium tubes without accounting for and paying duty thereon, the adjudicating authority dropped the demand as proposed in the show-cause notices for the reasons recorded, which we have already adverted to. The appellate authority, for reasons that the sequence of litigative events in respect of the earlier period did not come in the way of adjudication for the current period; that the 11 show-cause notices involved for the current period and decided by the adjudication order (dated 19.01.2009), were issued on the ground that the respondent assessee was required to pay duty on the value of aluminium scrap which were cleared without accounting and payment of duty and that the earlier order of the Tribunal dated 12.05.2005 (for the earlier period) did not bar such proceedings. As a consequence of this reasoning recorded, the appellate authority set aside the adjudication order dated 19.01.2009. The primary order is effaced and that by itself does not impose any liability on the assessee to remit tax. As a consequence the assessee suffers no prejudice nor is assessed to any duty, interest or penalty. In the circumstances, we find no reason to set aside the appellate order as no civil consequences are visited on the assessee.

Summary

Issues:
1. Allegation of clearing damaged aluminium tubes without accounting for and paying duty.
2. Interpretation of earlier litigative events and their impact on the current proceedings.
3. Applicability of duty on the value of aluminium scrap cleared without accounting and payment of duty.
4. Assessment of liability, determination of duty, and quantification of excise duty.
5. Effect of dropping the demand and setting aside the primary order on the appellant.

Analysis:

Issue 1: The appellant, a manufacturer of synthetic adhesives, procured aluminium tubes and availed CENVAT credit. Revenue alleged that the appellant cleared damaged aluminium tubes without accounting for and paying duty.

Issue 2: The litigative events from the earlier period were considered to determine the impact on the current proceedings. Previous orders by different authorities and courts were analyzed to assess the relevance of the current appeal.

Issue 3: The Commissioner (Appeals) concluded that the earlier litigative events did not bar the adjudication for the current period. The show-cause notices were issued based on the alleged duty liability on the value of aluminium scrap cleared without accounting and payment of duty.

Issue 4: The assessment of liability, determination of duty, and quantification of excise duty were not conducted by the primary or appellate authorities. No conclusive decision was made regarding the liability of the appellant to pay duty on the damaged aluminium tubes.

Issue 5: The appellate authority set aside the primary order, which did not result in imposing any liability on the appellant to remit tax. As no civil consequences were imposed on the appellant, the dismissal of the appeal did not cause any prejudice or assessment of duty, interest, or penalty on the appellant.