2017 (7) TMI 155 - AT - Central Excise

Waste and scrap - rejected pieces of insulated wire - It appeared to Revenue that the waste and scrap of Electrical Wires was classifiable under Tariff Item No. 85489000 - classification - Held that - original authority rightly held that waste and scrap of insulated electrical wires does not fall under Tariff Item No. 85489000 - for subsequent period waste and scrap cannot be classified under Tariff Item No. 85489000 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of waste and scrap generated during the manufacturing process under Tariff Item No. 85489000 for Central Excise duty.

Analysis:
The case involved three appeals arising from Orders-in-Appeal dated 18/01/2011, 16/06/2011, and 17/05/2013 passed by the Commissioner of Central Excise (Appeals), Noida, all related to the classification of waste and scrap generated during the manufacturing of Wiring Harness under Tariff Item No. 85489000 for Central Excise duty. The Original Authority, in Order-in-Original dated 15.07.2010, had held that the waste and scrap of insulated electrical wires does not fall under Tariff Item No. 85489000. The appellants contested the issue before the Commissioner (Appeals), who upheld the Orders-in-Original, leading to the appeals before the Tribunal.

The appellants argued that the waste and scrap generated by them, as per the Order-in-Original dated 15.07.2010, was not challenged by Revenue and had reached finality in law. They contended that the marketability of waste and scrap under the provisions of law did not automatically classify it under Tariff Item No. 85489000. They highlighted that the waste and scrap did not find classification under this Tariff Item, and Section 3 of the Central Excise Act, 1944, exempted the waste and scrap from Central Excise duty. Therefore, they argued that the waste and scrap generated by them should not be levied Central Excise duty under Tariff Item No. 85489000 based on the explanation to Section 2(d) of the Central Excise Act, 1944.

The Tribunal, after considering the contentions and the findings of the Original Authority in the Order-in-Original dated 15.07.2010, concluded that the waste and scrap of insulated electrical wires did not fall under Tariff Item No. 85489000. Since the said order of the Original Authority was not challenged by Revenue and had attained finality, the waste and scrap could not be classified under Tariff Item No. 85489000 for subsequent periods. Therefore, the Tribunal held that the impugned Orders-in-Original and Orders-in-Appeal were not sustainable and allowed all three appeals, entitling the appellants to consequential relief in accordance with the law.