2016 (11) TMI 1206 - AT - Central Excise

Levy of duty - paper waste and aluminium waste generated during the making and packing of cigarettes classified under CETH 4702.90 and CETA 7602.90 respectively - Held that - with regard to the same issue, learned Commissioner for the subsequent period has decided the same issue in favour of the appellant by holding that the cigarette waste paper and aluminium foil are not subject to excise duty and the department has not filed appeal against the same. Moreover in all the judgments cited by the learned counsel supra, the issue has been squarely decided in favour of the appellant. Learned A.R. could not controvert the submission of the appellant by producing any judgments in favour of the Revenue. In view of the settled position, we are of the considered view that the impugned order is not sustainable in law and we set aside the same by allowing the appeal with consequential relief, if any.

Summary

Issues:
Appeal against decision upholding duty demand on waste generated during cigarette manufacturing.

Analysis:
The appeal challenged a decision upholding a duty demand on paper and aluminum waste generated during cigarette manufacturing. The appellant, engaged in cigarette manufacture, received a show cause notice for duty demand on waste cleared without proper procedure. The Dy. Commissioner confirmed the duty demand and imposed a penalty. The Commissioner (Appeals) upheld the duty demand but set aside the penalty, leading to the present appeal.

The appellant argued that the impugned order had serious flaws, was non-speaking, and lacked judicial application. They contended that duty liability arises only on manufacture, which was absent in this case. Citing various case laws, the appellant asserted that waste like cigarette paper and aluminum foil was not excisable. Notably, the Commissioner (Appeals) in a subsequent period had ruled in favor of the appellant on the same issue, which was unchallenged by the department.

After considering arguments and case laws, the Tribunal found in favor of the appellant. They noted that the issue had been consistently decided in favor of the appellant in various judgments. The lack of contrary judgments in favor of the Revenue further supported the appellant's position. Consequently, the Tribunal held the impugned order as unsustainable in law and allowed the appeal, providing consequential relief as necessary.

In conclusion, the Tribunal set aside the decision upholding duty demand on waste generated during cigarette manufacturing, citing precedents and lack of contrary judgments in favor of the Revenue.