2017 (8) TMI 989 - AT - Central Excise

Waste and scrap were cleared without payment of duty - Held that - the paper waste is import of waste paper and the same was cleared as such. As regard the steel scrap, it is scrap generated from the maintenance of plant and machinery. On the both items appellant has not availed Cenvat credit. The Excise duty can be charged on the waste and scrap only (i) where waste and scrap is generated during the course of manufacture of excisable goods; and (ii) such waste and scrap of such excisable goods has been classified dutiable goods in the Central Excise Tariff, which is not the case here - Appeal allowed - decided in favor of the assessee.

Summary

Issues:
- Demand for Excise duty on clearance of waste and scrap without payment.

Analysis:
The appellant, engaged in manufacturing various products, was issued a show cause notice demanding Excise duty on the clearance of certain waste and scrap without payment. The appellant argued that the waste and scrap in question were not generated during the manufacture of excisable goods. The paper scrap was imported as raw material and cleared as such, while the steel scrap resulted from the maintenance of plant and machinery. It was emphasized that no Cenvat credit was availed on either item, hence no Excise duty should be chargeable. The appellant cited relevant judgments supporting their position.

The Revenue, represented by the ld. Asstt. Commissioner (AR), stood by the findings of the impugned order confirming the demand for Excise duty on the waste and scrap. However, upon careful consideration of the submissions from both sides and a review of the record, the Tribunal found that the show cause notice did not specify the basis for levying duty on the waste and scrap. The Tribunal noted that Excise duty can only be charged on waste and scrap generated during the manufacture of excisable goods, which must also be classified as dutiable goods in the Central Excise Tariff. In this case, as per the appellant's submissions, the waste and scrap did not meet these criteria. The Tribunal found the judgments cited by the appellant to be directly relevant to the case at hand and, therefore, set aside the impugned order, allowing the appeal with any consequential relief as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the demand for Excise duty on the clearance of waste and scrap, as the items in question were not generated during the production of excisable goods and did not fall under dutiable goods in the Central Excise Tariff. The judgment highlighted the importance of specific criteria for charging Excise duty on waste and scrap, ultimately leading to the decision to allow the appeal.