1998 (6) TMI 187 - AT - Central Excise

Summary

Issues:
1. Duty liability on waste product Leco.
2. Procedural infraction regarding clearance of waste product.
3. Time bar plea regarding provisional assessment.
4. Burden of proof on Revenue for dutiability of waste product.

Analysis:
1. Duty liability on waste product Leco:
The appellants utilized Leco in manufacturing Ferro Alloys, claiming proforma credit under Rule 56A and later benefiting from Notification No. 201/79-CE. The issue arose when fine particles of Leco, considered waste by the appellants, emerged during the crushing process. The Revenue demanded duty for the waste amount, leading to the appeal. The appellants argued that the waste was not marketable, hence not dutiable. They contended that the waste was fully cleared for non-dutiability, except for lacking permission for clearance without duty payment. The appellant's representative emphasized that duty liability only applies to marketable waste, which the Revenue failed to prove.

2. Procedural infraction regarding clearance of waste product:
The appellant's representative argued that any duty liability on the waste should not be imposed due to a procedural deviation regarding clearance permission. They contended that the waste, being a byproduct of the manufacturing process, did not result in revenue loss. The tribunal agreed that the waste's dutiability was not proven by the Revenue, thus dismissing the demand for duty.

3. Time bar plea regarding provisional assessment:
The appellant raised a time bar plea, citing provisional assessment status due to pending RT 12 Returns finalization. They referenced previous judgments to support their argument that no show cause notice could be issued until assessments were finalized. The tribunal acknowledged the provisional assessment status and considered the time bar argument, ultimately ruling in favor of the appellant.

4. Burden of proof on Revenue for dutiability of waste product:
The tribunal highlighted the burden of proof on the Revenue to establish the dutiability of the waste product. They emphasized that the waste's marketability and dutiability were crucial factors, with the absence of evidence indicating marketability. The tribunal concluded that no demand for duty could be sustained against the appellants due to the lack of proof regarding the dutiability of the waste product.

In conclusion, the tribunal allowed the appeal, setting aside the demand for duty on the waste product Leco. They granted consequential relief to the appellants, emphasizing the lack of evidence proving the dutiability of the waste and the procedural nature of the clearance issue.