2019 (11) TMI 1159 - AT - Central Excise

Demand of Central Excise duty - waste arising during the course of manufacturing of the wire and cables - CBEC Circular No. 904/24/2009/CX dt. 28.10.2009 - whether waste scrap arising out during the manufacture of wire cables is excisable or not? - HELD THAT - The appellant is manufacturing enameled wires and cables and during the course of manufacturing, such waste scrap arise - the waste scrap of wire cables is not a manufactured product, accordingly, waste and scrap are not goods and are not dutiable. In the decision of Hon ble Bombay High Court in the case of Hindalco Industries Ltd 2014 (12) TMI 657 - BOMBAY HIGH COURT , it was held that the waste and scrap, arising during the course of manufacture of final product, is not dutiable. Thus, the waste scrap, arising during the course of manufacture of enameled wires and cables, the appellant is not liable to pay the duty - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether waste & scrap arising during the manufacture of wire & cables is excisable?
2. Applicability of duty on waste & scrap arising during manufacturing.

Analysis:
Issue 1: The appellant appealed against the confirmed demand on waste arising during the manufacturing of wire and cables. An audit revealed non-payment of central excise duty on the removal of end cutting of wire and cables. The appellant argued that the waste & scrap of wire & cables is not a manufactured product and not dutiable based on previous decisions in their favor.

Issue 2: The appellant contended that the waste & scrap of wire & cables are not excisable goods and therefore not chargeable to central excise duty. They cited instances where similar demands were dropped in their favor by the Commissioner and the Commissioner (Appeals). The appellant also relied on a Tribunal decision and High Court and Supreme Court judgments supporting their position.

Decision: The Tribunal considered the manufacturing process of enameled wires and cables where waste & scrap arise. Referring to previous decisions and legal precedents, the Tribunal concluded that waste & scrap arising during the manufacturing process of the final product are not dutiable. Citing rulings from the Bombay High Court and the Supreme Court, the Tribunal held that the waste & scrap from the manufacturing of enameled wires and cables are not subject to duty. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

Overall, the Tribunal ruled in favor of the appellant, stating that waste & scrap arising during the manufacturing of wire & cables are not excisable goods and thus not liable for central excise duty. The decision was based on legal interpretations and precedents supporting the non-dutiable nature of such waste and scrap in the manufacturing process.