2015 (3) TMI 203 - AT - Central Excise

Waiver of pre deposit - Black Sand (Dross) cleared by the appellant without payment of duty - Held that - Appellant is a manufacture of Iron and Aluminium Castings. It is a fact that for manufacture of moulds, natural sand is used for preparation of sand-moulds which is mixed with resin or other materials to hold the sand mould together. After the castings are manufactured, the sand, which is burnt become black which is cleared as a waste. The Burnt Sand is sold for consideration and also is used for various other user industries. It is noticed that this very Bench in the case of Madras Aluminium Co. Ltd. Vs CCE Salem reported in 2005 (4) TMI 233 - CESTAT, CHENNAI allowed the appeal on similar issue. Therefore, the appellant has prima facie made out a case for total waiver of predeposit and stay of its recovery. Accordingly, we waive the predeposit of duty along with interest and penalty and stay recovery thereof till disposal of the appeals - Stay granted.

Summary

Issues: Waiver of duty, interest, and penalty applications arising from a common Order-in-Appeal regarding the classification of Burnt Sand under Central Excise Tariff Act, 1985.

Analysis:

1. Common Order-in-Appeal: The appellants filed applications for waiver of duty, interest, and penalty arising from a common Order-in-Appeal. The issue at hand pertained to the classification of Burnt Sand under Chapter Headings 73 & 76 of the Central Excise Tariff Act, 1985. The Orders-in-Original confirmed Central Excise duty, penalty, and interest for the clearance of Black Sand (Dross) by the appellant without payment of duty.

2. Contentions: The appellants argued that the burnt sand resulting from the manufacturing process of iron and aluminium castings was not distinct from natural sand and should not be considered excisable. They emphasized that no duty was previously demanded for the clearance of Burnt Sand. The appellant cited relevant case laws to support their argument against the imposition of penalty.

3. Counter-Arguments: The department contended that Burnt Sand was not a mere waste but had various applications, such as in Asphalt concreting and manufacturing of Portland Cement. They highlighted that Burnt Sand contained iron, steel, carbon material, and had distinct usage and marketability compared to natural sand.

4. Judgment: After hearing both sides, the Tribunal acknowledged that the Burnt Sand was a by-product of the manufacturing process and had commercial value in various industries. Referring to a previous case, the Tribunal found merit in the appellant's argument and granted a total waiver of predeposit, including duty, interest, and penalty. The Tribunal stayed the recovery of the amounts until the appeals were disposed of, based on the prima facie case made by the appellant.

In conclusion, the Tribunal allowed the appeal for waiver of duty, interest, and penalty applications concerning the classification of Burnt Sand under the Central Excise Tariff Act, 1985. The decision was based on the commercial usability and marketability of the Burnt Sand, granting the appellant relief from predeposit and recovery until the final disposal of the appeals.