2018 (4) TMI 947 - AT - Central Excise

Appellate Authority affirms assessee's waste classification stance over Revenue's pre-2005 argument, aligning with Supreme Court precedent.

Commissioner of Central Excise, Ghaziabad Versus M/s Bhushan Steels Limited

The Appellate Authority upheld the respondent-assessee's position regarding the classification of waste and scrap removal, following the Hon'ble Supreme ... CENVAT credit - removal of waste and scrap arising after cutting/ slitting the H. R. Coils - Revenue has demanded reversal of Credit by treating the removal of said waste and scrap (H. R. Side Slitting, H. R. End Cuttings, Side trimming, etc.) as removal of input as such - Held that: - in appellant's own case, COMMISSIONER OF CENTRAL EXCISE Versus BHUSHAN STEELS AND STRIPS LTD. [2006 (3) TMI 307 - SUPREME COURT], the Apex court has held that said end cutting/ side cutting would be classified under appropriate tariff heading. As a result of which the stand of assessee as scrap and stand of Revenue as removal of inputs as such, was not agreed with - credit remains allowed - appeal dismissed - decided against Revenue. Issues:Challenge to order of Appellate Authority regarding classification of waste and scrap, disagreement between Revenue and assessee on classification of side offcuts of H. R. Coils, application of judgments by Hon'ble Supreme Court and Hon'ble Delhi High Court, reliance on OIO dated 07/08/2009, consideration of jurisdictional Commissioner's decision, appeal based on judgment timing discrepancy, identification of identical facts to previous judgments.Classification of Waste and Scrap:The respondent-assessee, engaged in manufacturing C.R. Coils/Sheets, claimed credit on H.R. Coils used as raw material. Dispute arose when Revenue demanded credit reversal for waste and scrap removal, treating it as removal of inputs. Hon'ble Supreme Court, following precedent, classified end cutting/side cutting as per appropriate tariff heading, rejecting the Revenue's stance. The Appellate Authority upheld the assessee's position in line with the Supreme Court's judgment.Application of Judgments:The Revenue emphasized a prior Hon'ble Delhi High Court judgment pre-2005, while the Supreme Court's decision on the same issue for the same party was post-2006. Despite this, the Appellate Tribunal relied on the Supreme Court's ruling, disregarding the earlier High Court decision. The Tribunal found the facts in the present appeal to mirror those in the Supreme Court's judgment, leading to the rejection of the Revenue's appeal.Reliance on OIO and Commissioner's Decision:The respondent pointed to the OIO dated 07/08/2009, where the jurisdictional Commissioner dismissed similar Show Cause Notices. However, the Joint Commissioner confirmed the demand raised in the current case, diverging from the Supreme Court's judgment. The Appellate Authority, aligning with the Apex Court's decision, overturned the Joint Commissioner's ruling, emphasizing consistency with higher judicial pronouncements.Identification of Identical Facts:Acknowledging the undisputed similarity between the facts in the present appeal and the Supreme Court's judgment, the Tribunal rejected the Revenue's appeal and granted consequential relief to the respondent. By adhering to the Supreme Court's precedent and finding factual parity, the Tribunal maintained consistency in its decision-making process, ensuring adherence to established legal principles.This comprehensive analysis of the legal judgment highlights the key issues, the application of relevant judgments, the significance of OIO and Commissioner's decisions, and the importance of factual alignment with previous judicial determinations in resolving the classification dispute effectively.