2001 (12) TMI 131 - AT - Central Excise

Summary

Issues:
Classification of Aluminium waste and scrap under Chapter Sub-Heading 7602.90 for duty payment and penalty imposition.

Analysis:
The case involved a dispute regarding the classification of Aluminium waste and scrap by the appellants under Chapter Sub-Heading 7602.90 for duty payment and imposition of a penalty. The appellants were engaged in manufacturing Aluminium Doors, Windows, and Frames falling under Chapter Heading 76.10 of the Central Excise Tariff (CET) Schedule, availing the benefit of SSI exemption. The dispute arose from the clearance of unusable cut-pieces of Aluminium bars, rods, sections, and profiles without duty payment. The adjudicating authority classified the goods as waste and scrap under Chapter Sub-Heading 7602.90, demanding duty and imposing a penalty of Rs. 2,000, a decision upheld by the lower appellate authority.

The appellants contended that the cut-pieces were not different from the duty-paid inputs and were not excisable, citing various legal precedents. They argued that the process of cutting duty-paid goods did not constitute manufacture, hence no duty was payable on the cut-pieces. On the other hand, the departmental representative argued that the goods were waste and scrap within the meaning of Note 8(a) to Section XV of the CET Schedule, resulting from the same process as the final products and were marketable. The representative relied on specific Tribunal decisions to support this position.

Upon examination, the tribunal found that the cut-pieces were scrap resulting from the same process as the final products, making them marketable. The goods were classified under Chapter Sub-Heading 7602.90, which covers Aluminium waste and scrap not used for manufacturing unwrought Aluminium plates and sheets within the factory. The tribunal held that the goods in question fit the definition of waste and scrap under Section Note 8(a) to Section XV of the CET Schedule, making them chargeable to duty under Chapter Sub-Heading 7602.90. The tribunal upheld the duty demand but set aside the penalty since no findings supported its imposition.

In conclusion, the tribunal confirmed the duty demand on the Aluminium waste and scrap under Chapter Sub-Heading 7602.90 while setting aside the penalty imposed. The decision was based on the nature of the goods, their classification, and relevant legal provisions, ensuring compliance with the Central Excise Tariff Schedule.