2004 (1) TMI 502 - AT - Central Excise

Tribunal upholds decision on duty exemption for waste containers, following Supreme Court precedent.

COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH Versus ARIHANT COTSYN LTD.

The Tribunal dismissed the Revenue's appeal against the order of the Commissioner (Appeals) concerning the duty on waste containers used for packing ... Containers - Empty/Waste containers of modvatable inputs - Dutiability of Issues:1. Appeal against the order of the Commissioner (Appeals) dismissing the Department's appeal.2. Interpretation of Circular No. 449/15/99-CX and Tribunal's judgment in West Coast Industrial Gases Ltd.3. Supreme Court's decision on similar issues in other cases.4. Clarification by CBEC regarding duty on waste containers used for packing inputs.Issue 1:The appeal before the Appellate Tribunal CESTAT, New Delhi was filed by the Revenue against the order of the Commissioner (Appeals) dismissing the Department's appeal. The original authority had vacated a demand raised against the assessee concerning used (empty) containers of modvatable inputs, relying on Circular No. 449/15/99-CX. The Commissioner (Appeals) upheld the decision based on the said circular and the Tribunal's judgment in West Coast Industrial Gases Ltd. The Revenue challenged this decision in the present appeal.Issue 2:During the proceedings, no representation was made by the respondents. The Department reiterated the grounds of appeal, mentioning that the Supreme Court had admitted the department's appeal against the Tribunal's decision in West Coast Industrial Gases Ltd. Additionally, a Civil Appeal was filed by the Department against the Tribunal's decision in CCE, Cochin v. Southern Refineries Ltd. The Tribunal noted that the Supreme Court had dismissed the department's appeal in the case of CCE, Chandigarh v. Pepsi Foods Ltd., which reaffirmed the position on duty payable on used containers of modvatable inputs.Issue 3:The Tribunal referred to the Supreme Court's decision in CCE, Chandigarh v. Pepsi Foods Ltd., where the appeal against the Tribunal's decision in West Coast Industrial Gases Ltd. was dismissed. The CBEC issued a circular clarifying that no duty is payable on waste containers used for packing inputs when cleared from the factory of the manufacturer availing Modvat/Cenvat credit. This clarification further solidified the position against the Revenue's appeal.Issue 4:The Tribunal concluded that the question of excise duty on used containers of modvatable inputs had been settled against the Revenue based on the Supreme Court's decision and the CBEC circular. As a result, the Tribunal found the Revenue's appeal devoid of merit and dismissed it accordingly.