2014 (5) TMI 909 - AT - Central Excise

Tribunal rules for asbestos sheet manufacturer in waste disposal dispute, setting aside duty demand and penalty.

M/s. UAL - Uttar Pradesh Versus Commissioner of Central Excise Allahabad

M/s. UAL - Uttar Pradesh Versus Commissioner of Central Excise Allahabad - 2014 (310) E.L.T. 160 (Tri. - Del.) Issues:1. Shortage of asbestos sheets in stock detected during inspection.2. Allegations of clandestine clearance leading to demand of duty and penalties.3. Contention regarding the nature and disposal of waste asbestos sheets.4. Lack of evidence for clandestine removal of waste and duty liability.Analysis:1. The appellant, engaged in manufacturing asbestos cement sheets, faced shortage of 1073.551 MT of waste asbestos sheets during an inspection. The Deputy Manager accepted the shortage without explanation and deposited the duty leviable under protest.2. Proceedings were initiated against the appellant for allegedly clearing the waste in a clandestine manner. The show cause notice proposed duty demand confirmation and penalty imposition, leading to the order by the adjudicating authority, upheld by the Commissioner (Appeals), prompting the present appeal.3. The appellant argued that the waste asbestos sheets, which have no commercial value, are dumped within the factory premises and used for various purposes. They contended that the demand was based on shortages of waste that cannot be weighed due to their nature and disposal method.4. The Tribunal found the Revenue's case relying on waste clearance in a clandestine manner unsubstantiated. There was no evidence of clandestine removal of waste, which was not an excisable item. The inability to weigh small pieces of waste scattered around the premises further supported the decision. Citing a previous case, the Tribunal set aside the impugned order and allowed the appeal, providing relief to the appellants.