2012 (5) TMI 543 - AT - Central Excise

Tribunal Upholds Duty Payment Procedure for Scrapped Goods, Rejects Revenue's Challenge

The Tribunal upheld the respondent's procedure for payment of duty on scrapped goods, based on its earlier decision in the respondent's case for a ... CENVAT Credit - In the remaking process the respondents scrapped some quantity of rejected BOPP films by cutting and without subjecting to any process cleared the said scrapped goods for further making of granules and cleared the granules at NIL rate of duty under Notification No. 4/2006-CE dated 1.3.06 as amended - Held that:- As followed by the decision in assessee's own previous case [2010 (1) TMI 1105 - CESTAT AHMEDABAD] procedure followed by the respondent for payment of duty is correct. The appeal filed by the Revenue is on the ground that this order has not been accepted and an appeal has been filed. Since the issue was considered in detail by this Tribunal and the issue involved in the present appeal is same and only the period is different and there is no stay against the order of this Tribunal by the Hon’ble High Court of Gujarat - Decided against Revenue. Issues:1. Correctness of the procedure followed by the respondent for payment of duty on scrapped goods.Analysis:The case involved the respondent, engaged in manufacturing BOPP Film, availing cenvat credit under the Cenvat Credit Rules. The issue revolved around the respondent scrapping rejected BOPP films without subjecting them to any process, clearing the scrapped goods for making granules, and then clearing the granules at NIL rate of duty. The respondent also cleared the scrapped goods at a lower value, paying duty less than the cenvat credit taken on the BOPP films received back. The question was whether the scrapping process amounted to manufacture, and if the clearance of goods arising from scrapping should be treated as 'as such clearances,' requiring the reversal of cenvat credit under Rule 16(2) of the Central Excise Rules, 2002.The Commissioner (Appeals) had previously held that the procedure followed by the respondent for payment of duty on scrap was correct. The Tribunal noted that in the respondent's own case for a different period, a similar issue had been considered, and the Tribunal had ruled in favor of the respondent's procedure for payment of duty. As there was no stay against the Tribunal's order by the High Court of Gujarat, the Tribunal decided to follow its previous decision in the respondent's case. Therefore, the appeal filed by the Revenue challenging the correctness of the procedure followed by the respondent was rejected based on the precedent set by the Tribunal's earlier decision in the respondent's case for a different period.In conclusion, the Tribunal upheld the respondent's procedure for payment of duty on scrapped goods, citing its previous decision in the respondent's own case for a different period. The Tribunal found that the issue involved in the present appeal was the same as the earlier case, and as there was no stay against the Tribunal's previous order, the decision in the respondent's favor was maintained, rejecting the Revenue's appeal.