2008 (5) TMI 175 - AT - Central Excise

Duty payable on waste oil which emerged in the use of capital goods, namely, lubricating oil, coolant oil etc. - statutory provisions at the material time provided for collection of applicable duty when capital goods were cleared as waste and scrap. We find that, in the instant case, the waste oil is a mixture of various used oils and dirt which cannot be classified in any particular heading in the CETA Schedule. Therefore, no duty is payable on clearance of the impugned goods i.e. waste oil

Summary

Issues:
1. Challenge to order of the Commissioner (Appeals) vacating demand of duty on waste oil cleared during a specific period.
2. Classification of waste oil mixture for duty payment under Rule 57S of the Central Excise Tariff Act Schedule.

Analysis:
Issue 1: The appeal filed by the Revenue contested the order of the Commissioner (Appeals) that revoked a demand of Rs. 34,800/- on waste oil cleared by a company during a specific period. The original authority had linked the waste oil to the use of capital goods like lubricating oil and coolant oil. However, the lower appellate authority disagreed, stating that the waste oil was a mixture of various oils and non-excisable goods, hence not subject to duty payment. It was noted that a similar appeal involving the same assessee and product for an earlier period had been rejected by the predecessor of the lower appellate authority.

Issue 2: The Tribunal examined the statutory provisions in place at the time, which mandated duty collection when capital goods were cleared as waste and scrap. In this case, the waste oil was determined to be a blend of different used oils and impurities, making it challenging to classify under a specific heading in the Central Excise Tariff Act Schedule. Consequently, the Tribunal concluded that no duty was payable on the clearance of the waste oil mixture. Additionally, it was highlighted that the Revenue had not appealed against a similar decision made by the Commissioner (Appeals) regarding the same product and assessee for an earlier period. Therefore, the Tribunal dismissed the Revenue's appeal, deeming it lacking in merit.

This judgment underscores the importance of accurate classification of goods for duty payment under relevant statutory provisions. It also highlights the significance of consistency in decisions regarding similar cases involving the same parties and products.