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of <h1>Tribunal overturns demand on lead recovery batteries, rules in favor of Exide Industries Ltd.</h1> <h3>Exide Industries Ltd. Versus Commissioner of Central Excise, Pune-I</h3> Exide Industries Ltd. Versus Commissioner of Central Excise, Pune-I - 2017 (358) E.L.T. 474 (Tri. - Mumbai) Issues:Demand under Section 11A of Central Excise Act, 1944, appropriate interest under Section 11AA, and penalty under Rule 173Q upheld against the appellant.Analysis:The dispute revolved around the demand of &8377; 6,27,468/- under Section 11A of the Central Excise Act, 1944, along with interest under Section 11AA and a penalty of &8377; 1,00,000/- under Rule 173Q. The appellant, M/s. Exide Industries Ltd., challenged the order of the Commissioner of Central Excise (Appeals), Pune-I, which upheld the demand. The proceedings were initiated to recover differential duty as the appellant allegedly failed to declare the true assessable value while clearing unusable batteries to smelters for lead recovery, leading to duty evasion in August 1997.The appellant contended that the batteries used for destructive testing did not qualify as batteries and were only usable to the extent of recoverable lead. They had computed the clearance value based on the cost of recoverable lead content with a notional profit of 10%. The show cause notice, however, calculated the differential duty by adding 112.4% of the raw material cost as overheads to determine the assessable value.The appellant relied on the second proviso to Rule 49(1) of the Central Excise Rules, 1944, arguing that goods unfit for consumption were not liable for duty. They cited precedents to support their claim that goods destroyed during testing processes were not dutiable. The Tribunal noted that while batteries were assessed to duty upon clearance, they remained liable to duty upon creation. The Tribunal found no evidence supporting the inclusion of overheads in the assessable value of damaged batteries, highlighting the lack of statutory basis for such inclusion.The Tribunal concluded that the original and appellate authorities erred in redetermining the assessable value without sufficient justification. They held in favor of the appellant, setting aside the impugned order. The judgment was pronounced on 28-2-2017.
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