2003 (10) TMI 171 - AT - Central Excise

Appeal allowed: Waste from cigarette manufacturing not subject to Central Excise duty

INTERNATIONAL TOBACCO CO. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD

The Tribunal, comprising S/Shri V.K. Agrawal and P.S. Bajaj, found merit in the appellant's argument that waste and scrap generated during the ... Waste and scrap - Dutiability of Issues involved: Whether duty of Excise is payable on waste and scrap of paper generated during the manufacture of cigarettes.Comprehensive Details:- The appeal was filed by M/s. International Tobacco Ltd. challenging the demand for Excise duty on waste and scrap of paper.- The appellant argued that the waste generated during the manufacturing process does not attract Central Excise duty as no new product is manufactured from it.- The Dy. Commissioner and the Commissioner (Appeals) had upheld the demand for duty.- The appellant highlighted that there is no provision in the Cenvat Credit Rules, 2001 for payment of duty on waste and scrap arising during the manufacturing process.- The Revenue, represented by Sh. P.M. Rao, supported the findings of the lower authorities.- The Tribunal, comprising S/Shri V.K. Agrawal and P.S. Bajaj, considered the arguments and found merit in the appellant's submission.- It was noted that no new manufacturing process took place on the waste and scrap of paper, and there was no provision in the current rules for levying duty on such waste.- The Tribunal referred to the absence of a specific provision in the Cenvat Credit Rules, 2001, unlike the previous Rule 57F of the Central Excise Rules, 1944.- Consequently, the impugned order demanding duty on waste and scrap was deemed unsustainable, and the appeal by M/s. International Tobacco Ltd. was allowed.