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of <h1>Court quashes excise duty on confectionery scraps, remands for reevaluation.</h1> <h3>M/s IC. & E. MORTON (INDIA) LIMITED AND OTHERS Versus SUPERINTENDENT OF CENTRAL EXCISE, CHAPRA & OTHERS</h3> M/s IC. & E. MORTON (INDIA) LIMITED AND OTHERS Versus SUPERINTENDENT OF CENTRAL EXCISE, CHAPRA & OTHERS - 1980 (6) E.L.T. (99) (Cal.) Issues:Interpretation of Central Excises and Salt Act regarding classification of confectionery scraps for excise duty.Analysis:The petitioners, engaged in confectionery manufacturing, collected and sold scraps at a nominal price. The scraps were not considered confectionery nor covered under the Act's schedule. Despite no objections earlier, demands for excise duty were raised later. The petitioners contended that the scraps were not covered under Tariff Item 1A of the Act, emphasizing they were not confectionery. The Appellate Collector, however, viewed the scraps as parts of confectionery, subject to excise duty.The Appellate Collector's decision was challenged, arguing that the scraps were waste products unfit for consumption. The petitioners maintained that the scraps were obtained during manufacturing, not post-production. The court referred to precedents on the definition of 'manufacture' and emphasized the need for a distinct transformation for excisability. It was crucial to determine if the scraps were integral to the final confectionery product or mere by-products.The court noted the Collector's reliance on evidence and upheld his role as the judge of facts. However, the decision was deemed lacking in evidence to support the classification of scraps as confectionery. The court highlighted the need for a proper assessment of whether the scraps underwent significant transformation during manufacturing.Regarding time-barred demand notices and Rule 10A applicability, the court deferred a decision, opting to remit the case for fresh consideration by the Appellate Collector. The Collector was directed to reevaluate the matter, allowing the petitioners to present evidence and materials. The possibility of chemical examination of scraps for conclusive classification was suggested.In conclusion, the court quashed the Appellate Collector's order, remanding the case for reevaluation within two months. The Collector was instructed to consider all relevant materials and evidence, including potential chemical analysis. No costs were awarded, and the petitioner's deposited amount was made available for withdrawal upon application.
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