2014 (9) TMI 710 - AT - Central Excise

Waiver of duty, interest & penalty for steel processing activities not amounting to 'manufacture'

The Appellate Tribunal CESTAT CHENNAI granted a waiver of duty, interest, and penalty to an applicant who engaged in activities like cutting and slitting ... Waiver of pre-deposit of duty - demand was raised on the scrap generated during the process - Held that:- There is no dispute that the process undertaken by the applicant would not amount to “manufacture”. It is also seen that in this context ld. consultant drew the attention of the Bench to Notification No. 59/95-C.E., dated 18-5-1995 wherein waste, scrap arising out during the process of manufacture of excisable goods would be exempted from payment of duty. However, this notification is in different context in so far as in the present case, the process would not amount to “manufacture”. We find that prima facie the decision of the original authority is more appropriate in the present case and therefore applicant made out prima facie case for waiver of entire amount of duty along with interest and penalty. Accordingly, we grant waiver of pre-deposit of entire amount of duty along with interest and penalty and stay its recovery during pendency of the appeal - Stay granted. Issues: Application for waiver of pre-deposit of duty. Interpretation of whether the process amounts to 'manufacture'.In this judgment by the Appellate Tribunal CESTAT CHENNAI, the applicant filed an application seeking waiver of pre-deposit of duty amounting to Rs. 34,46,311 along with interest and penalty for the period February to December, 2008. The applicant, identified as a dealer, engaged in activities like cutting and slitting steel rolls to produce baby rolls or sheets. It was acknowledged that the process undertaken by the applicant did not constitute 'manufacture.'The applicant's counsel referred to Circular No. 811/8/2005-CX, dated 2-3-2005, during the proceedings. The dispute arose from a demand on scrap generated during the process. Initially, the demand was dropped by the original authority, but the Revenue appealed to the Commissioner (Appeals) who upheld the demand for duty, interest, and penalty.Upon review, the Tribunal noted that the process undertaken by the applicant did not amount to 'manufacture.' The consultant highlighted Notification No. 59/95-C.E., dated 18-5-1995, exempting waste and scrap from duty during the manufacture of excisable goods. However, the Tribunal clarified that this notification was not applicable as the process in question did not qualify as 'manufacture.' Consequently, the Tribunal found the original authority's decision more suitable in this scenario. As a result, the Tribunal granted a waiver of the entire duty amount, interest, and penalty, and stayed the recovery during the appeal process. The stay application was approved.