2017 (8) TMI 154 - AT - Central Excise

Sale of scrap - excisability - Department was of the view that Central Excise duty is required to be paid on the consideration received at the time of sale of such used moulds - Held that - these moulds were manufactured within the factory of the appellant and used for further manufacture within. Hence they retain the characteristic of manufactured goods and satisfy the requirements of Section 2(f) - The explanation inserted after excisable goods in Section 2(d) makes the statute clear that such goods are deemed to be marketable - excise duty is liable to be paid at the time of their clearance on the transaction value - appeal dismissed - decided against appellant.

Summary

Issues:
- Whether excise duty is payable on the sale of used moulds cleared as scrap by the appellant.

Analysis:
The appellant, engaged in manufacturing Sanitary Wares and Toilet Articles, used plaster of Paris moulds in their manufacturing process. After the moulds became worn out, they were sold as scrap. The Department demanded excise duty on the consideration received for the sale of these used moulds. The appellant contended that the sold moulds were merely scrap and not excisable goods, as they were not a result of the manufacturing process. The appellant argued that there is no specific classification for waste and scrap of moulds, and the demand for the subsequent period was dropped by the Commissioner (Appeals).

The Department, however, supported the duty demands, citing an explanation under Section 2(d) of the Central Excise Act, which deems goods capable of being bought and sold for a consideration as marketable. The worn-out moulds were considered marketable under this explanation. The Tribunal noted that the moulds were manufactured in-house and used for further manufacturing, benefiting from a nil rate of duty under a specific notification. Despite being worn out at the time of clearance, the moulds retained the characteristics of manufactured goods and were deemed marketable under the Act. The Tribunal held that excise duty was payable on the transaction value of the moulds at the time of clearance, as per the Cenvat Credit Rules, 2004.

In conclusion, the Tribunal upheld the duty demands, rejecting the appeals filed by the appellant. The judgment clarified that even though the moulds were sold as scrap after being worn out, they were still liable for excise duty due to their nature as manufactured goods and their marketability as per the relevant legal provisions.