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TMI Blog2011 (7) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... 65/2006, E/406-08/2009, E/855/2010, E/519/2010, E/ 730/2010 involve a common issues. 1.2 Appeal Nos. E/2966/2006, E/1052/2008, E/2526/2008, E/850/2010, E/525/2010, E/729/2010 involve common issues. 2. Heard both sides. 3.1 In the first set of appeals referred in para 1.1, appellant challenges demand of amounts under 57AD of the Central Excise Rules, 1944 / Rule 6(3)(b) of Cenvat Credit Rule (in all cases) and imposition of penalties (in four cases) as they cleared 'waste pulp' during the period from August, 2000 to January, 2009 without payment of duty and without maintaining separate accounts for inputs. In these cases, firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inferior pulp and other dutiable products, demand has been made under Rule 57AD of Central Excise Rules, 1944 and under Rule 6(3)(b) of Cenvat Credit Rules, 2004. 3.2 In the second set of appeals referred to para 1.2; appellant challenges demand of duty on 'waste paper sweepings' cleared by the appellants during the period from August, 2000 to January, 2009. The first show cause notice dated 6.9.2005 was issued demanding duty for the period August, 2000 to April, 2005, thus invoking the extended period and thereafter show cause notices were issued periodically. Original authority confirmed the demands and imposed penalties of equal amounts in 3 cases. The original authority however, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as arising out of manufacture but as a waste arising during the course of manufacture. The said product cannot be treated as excisable goods. Once it cannot be considered as excisable goods, the question of treating the same as exempted product does not arise. Under such a situation, the appellants should not be treated as manufacturing both dutiable and exempted products. The question of demand of any amount in terms of Rule 57AD(2)(b) CER, 1944 and Rule 6(3)(b) of CCR Rules, 2004, therefore, does not arise. 4.2 In this regard she relied on the following decisions :- 1. UP State Sugar Corporation Ltd. vs. CCE, Meerut [2000 (120) ELT 454 (Tri); 2. CCE, Meerut I vs. Star ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was fully aware of the entire facts. In this regard, she refers to the findings of original authority regarding a show cause notice No. 411 /AMB/ 2001 dated 1.11.2001 proposing demand of duty on waste paper. She submits that the distinction made by the authorities below that only dutiability of paper waste / bark was involved in the said show cause notice whereas in the instant case the issue of excisability and dutiability of waste paper is involved is artificial and does not merit acceptance. Therefore, there is no justification for invoking the extended period of limitation and imposition of penalties. 6.1 Learned DR submits that the appellants themselves have described the product coming out of hyd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; the quality is inferior and not to the standard required by the appellants, the said product cannot be treated as non-excisable. It is not being disputed that the buyers of these products have used the said waste pulp for manufacture of inferior grade paper and paper boards. Further processing of the waste pulp by the said buyers does not make the waste pulp cleared by the appellants as anything other than excisable goods. Since, what is described as waste pulp is basically pulp of inferior variety, which has been marketed, the same has rightly been treated as excisable goods. Since the rate of duty for the concerned tariff item was nil, the said goods have been rightly treated as exempted produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper and for using the same as paper.That being the case, the demand of duty on waste paper under Chapter Heading 470290 cannot be faulted. However, as duly noted by the original authority, there was a show cause notice issued in November, 2001 itself seeking to demand duty on waste paper. Under these circumstances, it cannot be held that the appellants have suppressed any relevant information regarding emergence of waste paper and that the department was not in the knowledge of relevant facts. Therefore, the invocation of extended period for demand of duty and imposition of penalties are not justified. 8. In view of the above, the Appeals are disposed of as follows:- (a) The demands which are beyond th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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