2008 (5) TMI 213 - AT - Central Excise

Floor sweepings which have arisen in the process of manufacturing of soap - floor sweeping comprises of waste material including mud rubbish and residual waste of raw material. He also states that the quantity of floor sweeping arising in the factory is less than 0.5% of the soaps manufactured - hold that the floor sweepings arising in this case are also not dutiable as the Department has not produced any evidence regarding marketability of the floor sweeping in question

Summary

Issues: Duty demand on floor sweepings in the manufacturing of soap.

In this judgment by the Appellate Tribunal CESTAT KOLKATA, the issue revolved around a duty demand of Rs. 24,766 on floor sweepings arising during the manufacturing of soap. The Appellant's Counsel argued that the floor sweepings comprised waste material like mud, rubbish, and residual waste, distinct from the recycled end-pieces of soap. The Counsel highlighted that the quantity of floor sweepings was minimal, less than 0.5% of the total soaps manufactured, and cleared at a nominal value due to undesirability of accumulation. The Counsel also pointed out the incorrect mention of Notification No. 8/02 in the invoices, leading to the disputed appellate order.

During the hearing, the Departmental Representative did not counter the arguments put forth by the Appellant's Counsel. The Tribunal, after considering the case records, appeal papers, and submissions, noted a previous decision where sweepings arising in the manufacture of cigarettes were held as not dutiable. The Tribunal emphasized the lack of evidence presented by the Department regarding the marketability of the floor sweepings in question. Consequently, the impugned order was set aside, and the Appeal was allowed with consequential relief to the Appellants.

The judgment highlighted the importance of evidence and proper substantiation in duty demand cases, emphasizing the need for the Department to provide conclusive proof regarding the marketability of the contested goods. The decision also underscored the significance of distinguishing between waste materials and recycled components in manufacturing processes to determine dutiability accurately. Ultimately, the Tribunal's ruling favored the Appellants based on the lack of evidence supporting the duty demand on the floor sweepings generated during the soap manufacturing process.