2009 (8) TMI 175 - AT - Central Excise

Whether the scrap generated in the factory of the appellants for the period from January 2001 to March 2002 was out of manufacturing process or not - MS scrap was generated as the resultant of various repairs and maintenance work of plants and that MS Turning and Boring scrap consisting of iron chips were formed while making required size holes on the iron pieces shaping of iron pieces to the required size etc. - revenue has submitted that the records placed in the matter revealed that the scrap out of turning and boring process which is clearly out of mechanical work in manufacturing process and hence the scrap so generated would clearly warrant duty liability. Impugned issue is covered by Tribunal s order reported in 2009 - TMI - 31967 - CESTAT NEW DELHI in the case of assessee themselves wherein it was held that no duty is liable on MS scrap borings turnings etc. generated by them in maintenance and repair work - Nothing has been brought to our notice which can reveal any challenge to the said decision by the Department before the Apex Court. In the facts and circumstances in our considered opinion there is no scope for re-adjudication of the same issue which has been already decided between the same parties in relation to the same subject matter by this Tribunal. The question on re-adjudication of the same issue for the different period in relation to the same product generated in the factory of the appellants themselves cannot arise unless additional evidence which would justify such adjudication is brought on record. Assessee s appeal is allowed

Summary

Issues:
Challenge to the invocation of extended period of limitation and duty liability on scrap generated.

Analysis:
The appeal arose from an order confirming duty demand and interest under the Central Excise Act, 1944, while dropping a portion of the demand on scrap/used filter bags. The challenge to the order was two-fold. Firstly, the respondent's invocation of the extended period of limitation was questioned, arguing that all relevant facts were known earlier. Secondly, it was contended that the scrap generated was not subject to duty liability as it was not from inputs under Cenvat credit or any manufacturing process. The appellant disclosed details of scrap generated during specific periods, emphasizing that no duty liability existed. The respondent justified the order, stating that the law did not require immediate issuance of show cause notice upon disclosure of duty evasion. The appellant argued that once details were provided, restricting the proceedings to a specific period precluded invoking extended limitation. Referring to legal precedents, the appellant asserted that the Department failed to disprove their claims regarding scrap generation and duty liability.

The Tribunal noted that a previous decision had ruled in favor of the appellant, stating no duty liability on scrap generated during maintenance and repair work. The Tribunal emphasized that the same issue had been conclusively decided in a prior appeal, and no challenge to that decision had been made. Therefore, re-adjudication of the same issue for a different period was unwarranted unless new justifying evidence was presented. As no new evidence was provided, the Tribunal found no basis to deviate from the prior decision. Consequently, the appeal succeeded, and the impugned order was set aside, granting consequential benefit to the appellant.