2005 (1) TMI 479 - AT - Central Excise

Central Excise Duty on Waste Products Upheld Despite Precedents

TAMIL NADU PETROPRODUCTS LTD. Versus COMMISSIONER OF C. EX., CHENNAI

The Tribunal held that Central Excise Duty is payable on waste products resulting from inputs with Modvat credit. The Appellants were found liable for ... Waste of inputs - Duty liability - Demand - Limitation Issues involved: Whether Central Excise Duty is payable on waste of inputs for which Modvat credit has been availed of; Whether the extended period for demanding duty is invocable.Analysis:1. Central Excise Duty on waste of inputs: The appeal raised the question of whether Central Excise Duty is chargeable on waste products resulting from inputs for which Modvat credit has been claimed. The Appellant argued that waste oil, spent acid, etc., are not goods under the Central Excise Act, as they are not manufactured products. They relied on precedents like Nirma Ltd. and Vikrant Tyres cases to support their stance. However, the Tribunal noted that the waste products in question had indeed arisen from processed inputs for which Modvat credit was taken. The Tribunal held that once Modvat credit is availed of, the provisions related to it apply, making the Appellants liable for duty on waste products. The Tribunal distinguished the cited cases as they involved different factual scenarios. The appeal was rejected, upholding the duty demand, but the penalty was reduced.2. Extended period for demanding duty: The Appellant contended that the demand for duty was time-barred as the extended period was not applicable due to their belief that the products were non-excisable. They cited the Cadila Laboratories case to support their argument. However, the Tribunal disagreed, stating that the Appellants had cleared the waste products without payment or declaration, justifying the use of the extended period for duty demand. The Tribunal referenced the B.P.L. Ltd. case to support the invocation of the extended period. The judgment upheld the duty demand against the Appellants, considering the circumstances, and reduced the penalty imposed.In conclusion, the Tribunal ruled that Central Excise Duty is payable on waste products arising from inputs for which Modvat credit has been availed of. Additionally, the extended period for demanding duty was deemed applicable in this case, leading to the affirmation of the duty demand against the Appellants, albeit with a reduced penalty.