2000 (9) TMI 692 - AT - Central Excise

Summary

Issues:
Duty confirmation on sale of Steel Drums, imposition of personal penalty, classification of Steel Drums as Waste and Scrap.

Analysis:
The judgment dealt with an appeal where duty amount and personal penalty were confirmed on the sale of Steel Drums, which were containers of the appellants' input, Calcium Carbide. The appellants explained that they received inputs packed in Steel Drums, which were later sold through public auctions after being emptied. The Revenue sought to charge duty on these containers again by classifying them as Waste and Scrap. The Tribunal referred to a previous decision where it was held that duty is not required to be paid on drums/barrels/containers in which duty-paid inputs are filled, and the manufacturer of the final product has taken Modvat credit. Following the previous decision, the impugned Order was set aside, and the appeal was allowed for the appellants.

The issue involved in the present appeal was found to be identical to a previous decision by the Tribunal. In the earlier decision, it was established that the appellants cannot be considered as manufacturers of the containers merely by emptying the contents. The containers, if durable and repeatedly used for various products, should not attract duty at each stage in the hands of the assessees who receive the filled containers. The Tribunal emphasized that the cost of containers added to the contents' cost is a matter between the manufacturer of the contents and the Central Excise Authorities for determining the assessable value. The appellants were entitled to Modvat credit of duty paid on the contents, not on the containers. Therefore, the impugned Order was set aside based on the precedent, and the appeal was allowed in favor of the appellants.

In conclusion, the Tribunal relied on a previous decision to determine the present appeal's outcome regarding the duty confirmation on Steel Drums and the imposition of personal penalty. The Tribunal reiterated that duty is not payable on containers where duty-paid inputs are filled, and the manufacturer of the final product has taken Modvat credit. By following the precedent, the impugned Order was set aside, and the appeal was allowed with consequential reliefs for the appellants.