Tribunal exempts waste used for packing from excise duty, citing transportation necessity.

The Tribunal allowed the appeals, finding that waste and paring used for packing final products were essential for safe transportation and fell outside the excisable goods category. The waste and paring were considered part of the transportation cost, leading to exemption under Notification 67/1995-CE. The appellant's payment of duty on a FOR destination basis and inclusion of freight charges in the value for Central Excise purposes supported this conclusion. As a result, the impugned order was set aside, and the appeals were allowed based on the presented factual and legal analysis.

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Issues:
1. Liability to pay duty on waste and paring used for packing final products.
2. Interpretation of Notification 67/1995-CE.
3. Treatment of waste and paring as part of transportation cost.
4. Eligibility for exemption under Cenvat Credit Rules, 2004.

Analysis:
1. The appeals involved a common issue regarding the liability to pay duty on waste and paring used for packing final products. The appellants, engaged in the manufacture of paper tubes and paper cores, availed cenvat credit on inputs and capital goods. The waste generated during manufacturing was cleared on payment of Central Excise duty. The Revenue contended that the waste and paring were not captively used by the appellant, leading to proceedings and imposition of penalties under Central Excise Rules, 2002.

2. The dispute revolved around the interpretation of Notification 67/1995-CE. The lower authorities held that goods used within the factory or in relation to the manufacture of the final product were exempted under the notification. However, the waste and paring generated during manufacturing were not considered to be used in relation to the final product, resulting in the demand for Central Excise duty and penalties.

3. The appellant argued that the waste and paring were essential for protecting the final products during transportation to clients, forming part of the transaction value. They contended that the waste and paring were used as cushioning material for safe transport, which should be treated as part of the transportation cost and not separately for duty purposes.

4. The Tribunal noted that the waste and paring may not fall under excisable goods category and were used for safe transport of final products. Considering the appellant's payment of duty on FOR destination basis and inclusion of freight charges in the value for Central Excise purposes, the Tribunal found no reason to deny the exemption under Notification 67/1995-CE. The impugned order was set aside, and the appeals were allowed based on the factual and legal analysis presented.

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