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TMI Blog2014 (12) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... t during the course of hearing submitted that the goods were sent to the job worker for recovery of gold and approximately 1% would be recovered. According to Revenue, it is waste and scrap of precious metal i.e. gold and it would be classified under Heading 7101 of CETA Commissioner (Appeals) proceeded on the basis of various case laws on the Sludge. All the case laws are related to Base metals which are classifiable under Chapter 72. Note 8 of Section XV of CETA'85 defines waste and scrap; Metal waste and scrap from manufacture of working of metals and metal goods definitely not usable as such of damage on clearance or for other reason. Chapter 71 is covered under Section XIV of CETA. Waste and scrap has not been defined in Chapter 71 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e records, at their factory premises found that the respondent cleared 2525.100 kgs. of recovered gold Sludge from their factory without payment of central excise duty to M/s.Nirvighnam Plantinum Ltd., Juhu, Mumbai vide Dispatch Voucher No.30046586 dt. 21.5.2002. A show cause notice dt. 27.11.2003 was issued proposing demand of Central Excise Duty amounting to ₹ 1,81,807/- for clearance of 2525.100 kgs. of recovered gold Sludge classifiable under sub heading 7101.80 of the CETA'85 alongwith interest and penalty. As the respondent paid the differential duty of ₹ 1,81,807/- along with interest of ₹ 18,648/- after the detection by the Central Excise officers, it was also proposed to appropriate the amount of duty along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 11AC would be invoked. 4. On the other hand, Ld. Advocate on behalf of respondent submits that admittedly, the respondent cleared Sludge arising during the process of manufacture of gold ornaments and jewellery watches. It is different from waste and scrap of precious metal as mentioned under Heading 7101.80 of CETA'85. He submits that the word sludge as understood in the trade parlance is unusable product which cannot be treated as waste and scrap and therefore the Commissioner (Appeals) after detail discussion had come to the conclusion that the clearance of sludge cannot be covered under Heading 7101.80. He also relied upon the judgement of Hon'ble Gujarat High Court in the case of CCE Customs, Daman Vs Dhakad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reconstructed precious or semi-precious stones; dust and powder of natural or synthetic precious or semi- precious stones; articles of natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed); precious metals and metals clad with precious metal; articles of jewellery (other than imitation jewellery) and parts thereof; imitation jewellery; other articles of precious metal or of metals clad with precious metal; waste and scrap of precious metal or of metals clad with precious metal; other waste and scrap containing precious metal or precious metal compounds of a kind used principally for recovery of precious metal; coin. xxx xxx xxx 7101.80 Dust and powder of natural or syn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining precious metal or precious metal compounds of a kind used principally for recovery of precious metal; coin . 6.2 Chapter 71.12 of HSN covers waste and scrap of any metal containing precious metal used principally for recovery of previous metal . HSN Notes to Heading 71.12 included waste and residues derived from the mechanical working of precious metal in jewellery workshops etc. In the present case, the impugned goods were obtained from refining of precious metal namely gold. In our considered view, the recovery of Sludge from refining of gold as cleared by the respondent would be covered under heading 7101.80 of CETA'85. 7. In the impugned order, Commissioner (Appeals) proceeded on the basis of various case laws on the S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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