2023 (6) TMI 4 - AT - Central Excise

Recovery of Central Excise Duty alongwith interest and penalty - manufacturing waste arising during the course of manufacture even if the same is cleared for certain consideration - HELD THAT - The issue is no longer res-integra and have been considered by this Tribunal time again - reliance can be placed in the case of HINDALCO INDUSTRIES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, NAVI MUMBAI AND NAGPUR 2022 (12) TMI 1295 - CESTAT MUMBAI where it was held that It is seen from the decision of the Hon ble High Court of Bombay in HINDALCO INDUSTRIES LIMITED VERSUS THE UNION OF INDIA, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, THE COMMISSIONER OF CENTRAL EXCISE 2014 (12) TMI 657 - BOMBAY HIGH COURT that dutiability of the impugned goods, which had been held by the Tribunal to be excisable even after the amendment inserting Explanation in section 2(d) of Central Excise Act, 1944 with effect from 10th May 2008, did not find favour in the light of several decisions. There are no merits in the impugned order and the same is set aside - appeal allowed.

Summary

Issues Involved:
1. Demand of Central Excise Duty on Mill Scale
2. Recovery of Interest
3. Imposition of Penalty

Summary:

1. Demand of Central Excise Duty on Mill Scale:
The core issue was whether the appellant is liable to pay Central Excise duty on the sale of "Mill Scale" under Chapter Sub Heading No. 2619.00 of the Central Excise Tariff Act, 1985. The Tribunal noted that the appellant, engaged in manufacturing excisable goods, used raw materials on which Cenvat credit was availed. During the manufacturing process, Mill Scale emerged as waste, which was sold without accounting in specified records or paying Central Excise duty. The Tribunal referenced the definition of "manufacture" under Section 2(f) of the Central Excise Act, 1944, which includes any process incidental or ancillary to the completion of a manufactured product. It was concluded that Mill Scale, being capable of being bought and sold, qualifies as "excisable goods" under Section 2(d) of the Central Excise Act, 1944, and is thus subject to duty.

2. Recovery of Interest:
The Tribunal upheld the recovery of interest on the confirmed duty amount of Rs. 23,38,602/- under Section 11AB of the Central Excise Act, 1944. This interest is applicable due to the delayed payment of the excise duty on Mill Scale.

3. Imposition of Penalty:
A penalty equal to the duty amount was imposed on the appellant under Section 11AC of the Central Excise Act, 1944, read with Rule 25 of the Central Excise Rules, 2002. The Tribunal noted that if the appellant opted to pay the confirmed duty along with the entire interest within 30 days, the penalty would be reduced to 25% of the confirmed demand.

Conclusion:
The Tribunal set aside the impugned order, referencing the decision of the Hon'ble High Court of Bombay in Hindalco Industries Ltd v. Union of India, which clarified that manufacturing waste arising during the course of manufacture, even if sold for consideration, is not excisable. The appeal was allowed, and the Tribunal did not find any merits in the impugned order.