2017 (3) TMI 852 - AT - Central Excise

Waste and scrap - liability of duty - whether the appellant is required to reverse 10% of the value of waste and scrap generated during the course of manufacturing wire and cables or not? - Held that - the appellant is engaged in the manufacturing of wire and cables and during the course of manufacturing of wire and cables some waste and scrap generated which is not a manufactured the goods as per Section 2(d) of the Central Excise Act, 1944. A similar issue came up before this Tribunal in appellant s own case for the earlier period wherein this Tribunal held that the appellant is not required to reverse 10% of value of exempted goods or to pay duty on waste and scrap cleared by the appellant - the amount of @ 10% of the value of exempted final goods is not payable by the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant is required to reverse 10% of the value of waste and scrap generated during the manufacturing of wire and cables or not?

Analysis:
The case involved the appellant, a manufacturer of wire and cables, who cleared waste and scrap without paying duty. Show cause notices were issued demanding payment for the value of waste and scrap cleared. The Tribunal considered whether the appellant was liable to reverse 10% of the value of waste and scrap generated during manufacturing.

The appellant's counsel argued that waste and scrap generated during manufacturing did not qualify as manufactured goods under Section 2(d) of the Central Excise Act, 1944. Referring to a previous Tribunal ruling and the case of Finolex Cables Ltd., it was asserted that waste and scrap were not excisable goods and not subject to duty. The counsel also cited the decision of Balrampur Chini Mills Ltd. in support of the appellant's position.

On the contrary, the respondent's representative supported the findings in the impugned order, maintaining the demand for payment.

After hearing both parties, the Tribunal analyzed the arguments. It was established that waste and scrap generated during the manufacturing process of wire and cables did not qualify as manufactured goods under the Central Excise Act. Citing a previous ruling in the appellant's favor, the Tribunal concluded that the appellant was not obligated to reverse 10% of the value of exempted goods or pay duty on waste and scrap cleared. Consequently, the impugned orders were set aside, and the appeals were allowed with any necessary consequential relief.

The judgment clarified that the appellant was not required to pay the demanded amount for the waste and scrap generated during the manufacturing process, as it did not constitute manufactured goods under the Central Excise Act. The decision was based on legal interpretations and precedents, ultimately favoring the appellant's position and overturning the previous orders demanding payment.