2012 (6) TMI 746 - AT - Central Excise

Duty demand - Whether the respondent should be asked to pay duty of excise on carton waste, crown waste, glass scrap, crate scrap, pet-bottle scrap, PVC cans and plastic crowns which were cleared by them under commercial invoices without payment of duty during the period from April, 1997 to November, 2001 - Held that - Adjudicating authority examined the very excisability of the above materials and held in favour of the assessee by relying on the Hon ble Supreme Court s decision in CCE vs. West Coast Industrial Gases Ltd. 2003 (4) TMI 110 - SUPREME COURT OF INDIA wherein it was held that no duty was payable on used/waste containers cleared from factory by a manufacturer after availing MODVAT/CENVAT credit. In the present appeal, the appellant has not stated any reason why the Hon ble Supreme Court s decision is not applicable to the facts of the present case. The Tribunal s decision in the case of Nestle (I) Ltd. (2002 (11) TMI 424 - CEGAT, NEW DELHI) cited by the Superintendent(AR) is of no support to the appellant inasmuch as, in that case, it was not in dispute that Rule 57F(18)(a) was applicable. In the instant case, this Rule was not invoked in the show-cause notices and hence the assessee did not have any occasion to consider the applicability of the rule - Decided against Revenue.

Summary

Issues:
Whether duty of excise should be paid on various waste materials cleared without payment of duty.

Analysis:
In this appeal, the main issue is whether the respondent should be liable to pay duty of excise on different waste materials cleared without duty payment from April 1997 to November 2001. The appellant argues that since these materials arose from processed inputs with MODVAT/CENVAT credit, duty should have been paid upon their removal as if they were manufactured in the factory, citing sub-rule 18 of Rule 57F of the Central Excise Rules, 1944. The appellant's plea is supported by the Superintendent (AR) and a precedent case of CCE vs. Nestle (I) Ltd. [2003(152) ELT 347 (Tri. Del.)].

Upon review, the Tribunal found that the rule regarding payment of duty on waste materials was not mentioned in the show-cause notices. The adjudicating authority had already ruled in favor of the assessee, relying on a Supreme Court decision in CCE vs. West Coast Industrial Gases Ltd. [2003(155) ELT 11 (SC)], stating that no duty was payable on waste containers cleared after availing MODVAT/CENVAT credit. The appellant failed to provide reasons why the Supreme Court's decision was not applicable in this case. Additionally, the Tribunal clarified that the precedent case cited by the appellant was not relevant as the specific rule was not invoked in the show-cause notices, leading the assessee to not consider its applicability. Therefore, the rule was being invoked for the first time in the present appeal.

As a result of the above analysis, the Tribunal dismissed the appeal, emphasizing that the rule regarding payment of duty on waste materials was not appropriately raised earlier and that the appellant failed to provide sufficient grounds to challenge the previous decisions based on established legal principles.

This judgment highlights the importance of procedural adherence and legal consistency in invoking relevant rules and precedents in excise duty matters, ensuring fair treatment and legal certainty for the parties involved.