2000 (10) TMI 760 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand of duty and imposition of personal penalty by the Commissioner of Central Excise.
2. Interpretation of provisions of Rule 57F(2) and Rule 57F(4) regarding clearance of waste and scrap.
3. Allegations regarding waste and scrap arising at job workers' factory not being sent back to the appellants.
4. Argument on limitation regarding the issuance of the show cause notice.

Analysis:

1. The judgment addresses the confirmation of duty demand and the imposition of a personal penalty by the Commissioner of Central Excise. The appellants contested the demand based on the provisions of Rule 57F(2) and Rule 57F(4) concerning the clearance of waste and scrap. The show cause notice raised the demand for duty alleging that waste and scrap were not returned by job workers to the appellants. The appellants argued that the duty demand was unjustified as per the Larger Bench's decision allowing clearance under Rule 57F(2) without duty payment.

2. The issue of waste and scrap arising at the job workers' factory, specifically paper and plastic materials, was raised. The appellants claimed that the job workers cleared the waste and scrap by paying duty, and as per previous Tribunal decisions, waste and scrap of PVC wires and cables were not excisable commodities. Therefore, the demand for duty on such waste and scrap was deemed unwarranted and unjustified.

3. The appellants raised an argument on the limitation period, stating that the show cause notice issued in 1991 for the period from 1986 to 1990 did not allege suppression or misstatement to evade duty payment. They contended that without such allegations, the extended period of limitation was not applicable to the Revenue. The Tribunal agreed, emphasizing that the demand raised beyond the normal six-month period without invoking the proviso to Section 11A was barred by limitation.

4. The Tribunal, after considering submissions from both sides, ruled in favor of the appellants. It highlighted that the demand for duty on waste and scrap removed from the appellants' premises was not valid as the appellants had opted for clearance under Rule 57F(2) with proper permission. Additionally, the Tribunal agreed that the duty demand on PVC waste and scrap was unjustified based on previous Tribunal decisions and the non-applicability of duty on such materials. Consequently, the appeal was allowed on both merit and limitation grounds, overturning the Commissioner's decision.