2023 (2) TMI 1264 - AT - Central Excise

Excisability - waste arising in the form of cigarette/CT paper mix pulp aluminium foil during the course of manufacture of cigarette - HELD THAT - The issue is no longer res integra. In the case of INTERNATIONAL TOBACCO CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE GHAZIABAD 2003 (10) TMI 171 - CESTAT NEW DELHI the Tribunal has held The Revenue has not controverted the contention of the learned Advocate for the appellants that there is no provisions in Cenvat Credit Rules 2001 providing for payment of duty on waste and scrap which has arisen during the manufacture of the finished product. Such a provision had existed in the erstwhile Rule 57F of the Central Excise Rules 1944. In view of this the impugned order is not sustainable. The facts being completely identical following the decision of the Tribunal in appellant s own case the impugned order needs to be set aside - Apppeal allowed.

Summary

Issues:
- Appeal against Order-in-Appeal No. BR(374-377)MI/2012 dated 22.10.2012
- Upholding of orders-in-original demanding duty on unusable materials
- Adjudication of show cause notices demanding duty
- Applicability of previous Tribunal decisions on duty liability for waste material

Analysis:
1. The appeals were filed against Order-in-Appeal No. BR(374-377)MI/2012 dated 22.10.2012, where the Commissioner of Central Excise (Appeals), Mumbai-I upheld the orders-in-original demanding duty on unusable materials arising during the manufacture of cigarettes.

2. The appellant, engaged in cigarette manufacturing, faced show cause notices demanding duty on unusable materials like cigarette/CT paper, mix pulp, and aluminum foil. These notices were adjudicated through orders-in-original and subsequently dismissed in the impugned order.

3. During the proceedings, the appellant argued that the issue had been previously decided by the Tribunal in their favor, citing a specific order [2016 (2) TMI 253 - CESTAT MUMBAI]. The Authorized Representative for the Revenue reiterated the findings in the impugned order.

4. The Tribunal examined the impugned order, submissions made during the appeal, and arguments presented. Referring to the case law, specifically the decision in International Tobacco Co. Ltd. [2003 (10) TMI 171 - CESTAT NEW DELHI], it was noted that no provision under Cenvat Credit Rules, 2001 mandated duty payment on waste arising during manufacturing. The Tribunal set aside the impugned order, following precedents and established principles.

5. Relying on the previous decisions, including the one in the appellant's own case, the Tribunal held that the impugned order demanding duty on unusable materials needed to be set aside. Consequently, the appeals were allowed, and the impugned order was overturned based on established legal principles and precedents.

6. The judgment emphasizes the importance of legal precedents and established principles in determining duty liability for waste materials in manufacturing processes, providing clarity on the applicability of such decisions to similar cases.