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2015 (2) TMI 135 - HC - Central ExciseExcisability of waste and scrap - Invocation of extended period of limitation - Whether the CESTAT is right in giving the relief to the assessee with reference to the excisability and durability of plastic waste and scrap based on the Order-in-Original No.12/95 dated 15.9.1995 which had been set aside by the Commissioner (Appeals) and CESTAT, wherein both the authorities had held that plastic waste and scrap are excisable and dutiable - Held that - On a perusal of the order of the Tribunal, the facts, as is evident, make it clear that on and from 1.3.94, i.e., period post the order of the Deputy Commissioner of Central Excise dated 15.9.95, till the order in appeal No.37/02 dated 8.6.02, the assessee was under the bona fide impression that removal of waste and scrap does not attract duty. The Department had chosen not to issue notice pending appeal, for which failure thereof, they are not entitled to invoke the proviso to Section 11-A, as has been rightly held by the Tribunal. - Tribunal was justified in allowing the appeal on the question of limitation. There is no such finding of fact by the Commissioner (Appeals), for invoking the extended period in terms of proviso to Section 11-A of the Central Excise Act and, therefore, a question of fact, which was not the subject matter of finding by the Commissioner (Appeals) and not dealt with therein, ought not to have been raised and, therefore, the said question does not require to be answered by this Court. - Decided against Revenue.
Issues:
1. Appeal challenging Appellate Tribunal's order. 2. Excisability and durability of plastic waste and scrap. 3. Demand invoking extended period under Central Excise Act. 4. Allegation of evasion of Central Excise duty. 5. Imposition of penalty. 6. Bona fide belief of the assessee regarding duty payment. 7. Tribunal's decision on limitation and duty demand. Issue 1: Appeal challenging Appellate Tribunal's order The High Court heard the appeal by the Revenue challenging the Appellate Tribunal's order favoring the assessee. The Court admitted the appeal and framed substantial questions of law for consideration. Issue 2: Excisability and durability of plastic waste and scrap The dispute revolved around whether plastic waste and scrap were excisable and dutiable. The Commissioner held that duty was payable on the waste and scrap cleared by the assessee, despite their contention that they believed no duty was applicable. The Commissioner's decision was upheld by the Appellate Tribunal. Issue 3: Demand invoking extended period under Central Excise Act The demand for duty was made invoking the extended period under the Central Excise Act, alleging suppression of facts by the assessee. The assessee argued that they acted in good faith based on previous orders and had no intention to evade duty. Issue 4: Allegation of evasion of Central Excise duty The Revenue alleged that the assessee evaded Central Excise duty by clearing waste and scrap without payment. The Commissioner imposed penalties and upheld the duty demand, leading to the appeal before the Tribunal. Issue 5: Imposition of penalty The Commissioner imposed penalties on the assessee for contraventions related to duty payment on waste and scrap. The Tribunal's decision on the penalty was a crucial aspect of the appeal. Issue 6: Bona fide belief of the assessee regarding duty payment The assessee claimed they were under a bona fide belief that no duty was payable on the waste and scrap cleared by them. They argued that their actions were based on genuine belief and not with the intent to evade duty. Issue 7: Tribunal's decision on limitation and duty demand The Tribunal allowed the appeal based on the plea of limitation raised by the assessee. It held that the Department could not invoke the extended period of limitation for demanding duty on waste and scrap, given the genuine belief of the assessee. The Tribunal set aside the demand and related penalties, leading to the Revenue's appeal before the High Court. In conclusion, the High Court dismissed the appeal by the Revenue, upholding the Tribunal's decision on limitation and duty demand. The Court found no grounds for interference and emphasized the bona fide belief of the assessee in determining the duty liability on plastic waste and scrap.
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