2000 (9) TMI 782 - Commissioner - Central Excise

Summary

Issues:
1. Confirmation of demand under Rule 9(2) of Central Excise Rules, 1944 read with Section 11-A of Central Excise Act, 1944.
2. Imposition of penalty under Rule 173Q(1)(a) read with Rule 173Q(1)(bb) of Central Excise Rules, 1944.
3. Allegation of contravention of Rule 57F(1)(ii), 173F read with Rule 9(2) of Central Excise Rules, 1944.
4. Interpretation of the definition of 'waste & scrap' under Section Note 8(a) of Section XV of the Tariff.
5. Classification of subject goods under Heading 7216.90 based on the Supreme Court judgment in the case of LML Ltd.

Analysis:
1. The appellant challenged the demand and penalty imposed under Rule 9(2) of Central Excise Rules, 1944. The issue revolved around the clearance of remnants of 'M.S. Sheets' as waste and scrap, leading to differential duty payable. The appellants argued that the goods cleared were indeed scrap and not liable for duty as alleged.

2. The adjudication involved a detailed examination of the process followed by the appellants in clearing the remnants of M.S. Sheets. The appellants contended that the scraps were sold to scrap dealers for metal recovery, supporting their claim with relevant Tribunal decisions. The Supreme Court judgment in the LML Ltd. case was cited to establish the classification of the goods as scrap.

3. The primary issue focused on whether the remnants qualified as 'waste & scrap' under Rule 57F(4) or should have been cleared under Rule 57F(1)(ii) as M.S. Sheets. The appellant's argument, backed by the LML Ltd. case, emphasized that the goods were not usable as sheets and hence correctly cleared as scrap.

4. A subsidiary issue arose regarding the classification of the subject goods under Heading 7216.90 based on the LML Ltd. judgment. The Adjudicating Authority's rejection of this claim was challenged, emphasizing the applicability of the Supreme Court's decision.

5. The judgment extensively analyzed the evidence presented by the appellants, including tender documents and invoices, to establish the nature of the cleared goods. The absence of evidence showing further use of the subject goods supported the conclusion that they qualified as waste and scrap for metal recovery.

6. Ultimately, the Commissioner set aside the Order-in-Original, ruling in favor of the appellants. The decision rested on the classification of the subject goods as waste under Rule 57F(4), aligning with the interpretation of 'waste & scrap' and the precedents set by the Supreme Court and Tribunal decisions. The appeal was allowed, granting consequential relief to the appellants.