2015 (3) TMI 255 - AT - Central Excise

Mandatory equivalent penalty - Suppression of facts - Excisability of sludge and pulper waste and refuge - Held that - Following decision of assessee's own previous case 2014 (4) TMI 416 - CESTAT NEW DELHI - Decided in favour of assesse.

Summary

Issues involved:
1. Confirmation of demand under Central Excise Act for 'sludge' and 'pulper waste and refuge' generated during the manufacture of writing and printing paper.
2. Applicability of the amendment to Section 2(d) of the Central Excise Act with effect from 10.05.2008.
3. Interpretation of the term 'goods' under Section 2(d) of the Central Excise Act.
4. Comparison with a previous CESTAT order in a similar case.

Analysis:
1. The appeal was filed against Order-in-Appeal No. GZB-EXCUS-000-APP-133-13-14 dated 10.09.2013, which confirmed a demand of Rs. 33,505 for the period May 201 to Feb 2012, along with interest and a penalty for suppression of facts. The issue revolved around whether 'sludge' and 'pulper waste and refuge' generated during the manufacturing process were liable for duty under the Central Excise Act.

2. The adjudicating authority based its decision on the amendment to Section 2(d) of the Central Excise Act, which added an explanation stating that 'goods' include any article, material, or substance capable of being bought and sold for consideration. This explanation was added through Section 78 of the Finance Act 2008, effective from 10.05.2008. The authority deemed the items in question as 'marketable' goods subject to duty.

3. The appellants argued that a previous CESTAT order (No. A/50888-50890/2014-EX [DB] dated 07.03.2014) favored their case. With the consent of the respondent, the appeal was considered without the need for a pre-deposit. The CESTAT examined the issue and found that the same issue had been addressed in the appellants' favor in the earlier order cited by them.

4. The CESTAT, in line with the previous order, concluded that 'sludge' and 'pulper waste and refuge' were not excisable as they did not arise from manufacturing activities. Additionally, the items were found to be exempted from duty under Notification No. 76/86-CE, dated 10.02.1986. Consequently, the appeal was allowed, and the Order-in-Appeal was set aside based on the precedent established in the earlier CESTAT decision.

This comprehensive analysis highlights the legal intricacies and interpretations involved in the judgment, emphasizing the application of statutory provisions and precedents to determine the liability for duty under the Central Excise Act.