2015 (10) TMI 103 - AT - Central Excise

Captive consumption - Revenue, contended that use of tin containers for packing of soya oils cannot be held consumption of goods in the manufacture of the specified goods - Exemption under Notification No. 10/96-C.E., dated 23-7-1996 - Held that - tin containers manufactured in the appellant s factory and used for packing of Vanaspati have to be regarded as having been consumed within the factory of manufacture and the benefit of the notification would be available. - Admittedly the issue in the case of Mihijam Vanaspati Ltd. 2001 (1) TMI 152 - CEGAT, KOLKATA , was identical to the issue before the Adjudicating Authority. The Tribunal having declared the law in respect of the same very notification, the original authority was bound to follow the same, unless the said declaration of law stand set aside by any other higher forum. It was not open to the original adjudicating authority to take a different view by introducing his own interpretation and by taking support of other decision which are not directly on the point. It is not the case of the Revenue that the said decision of the Tribunal was not accepted and was appealed against by them. In the absence of any such developments, it goes without saying that the Tribunal s orders are binding on the lower authority, who should have followed the same. - inasmuch as issue is finally decided, the impugned orders are not sustainable. Accordingly, the same are set aside - Decided in favour of assessee.

Summary

Issues: Duty liability on tin containers for packing soya oil under Notification No. 10/96-C.E.

Analysis:
The appeals revolve around the duty liability concerning tin containers used for packing soya oil, claiming exemption under Notification No. 10/96-C.E. The appellant, engaged in manufacturing refined soya oil and tin containers, argued that the containers are exempt from duty as they are consumed within the factory for packing soya oil, a specified item under the notification. However, the Revenue contended that using tin containers for packing does not constitute consumption in the manufacture of specified goods, leading to proceedings against the appellant. The original Adjudicating Authority confirmed the duty demand on the containers but refrained from imposing a penalty due to the interpretational nature of the issue.

The appeals against the Adjudicating Authority's decision were rejected by the Commissioner (Appeals), who upheld the duty demand and imposed penalties. The Tribunal referenced past decisions in similar cases, emphasizing that tin containers used for packing goods should be considered consumed within the factory, thus qualifying for the notification's benefit. Despite this, the original Adjudicating Authority deviated from the Tribunal's interpretation, citing different legal principles to argue against the consumption of tin containers in the manufacturing process.

The Tribunal criticized the original Adjudicating Authority's departure from established precedent, highlighting that the Tribunal's decisions should be binding unless overturned by a higher forum. Consequently, the Tribunal set aside the impugned orders and remanded the appeals to the original adjudicating authority for reconsideration in line with the Tribunal's legal interpretation from previous cases. This decision underscores the importance of consistency in applying legal principles and respecting precedents set by higher authorities in similar matters.