TaxTMI 
TaxTMI 
2015 (2) TMI 135
X X X X Extracts X X X X
X X X X Extracts X X X X
....eal. This Court, vide order dated 26.10.07 admitted the appeal by framing the following substantial questions of law :- 1) Whether the CESTAT is right in giving the relief to the assessee with reference to the excisability and durability of plastic waste and scrap based on the Order-in-Original No.12/95 dated 15.9.1995 which had been set aside by the Commissioner (Appeals) and CESTAT, wherein both the authorities had held that plastic waste and scrap are excisable and dutiable? 2) Whether the CESTAT is right in holding that the demand made invoking extended period under proviso to Section 11-A of Central Exci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for which further processing was done in their factory premises and consequently whatever duty was paid on the said scrap, they would have also got the benefit of modvat credit and in the process, the whole exercise of paying the duty and later on claiming the equivalent amount of modvat credit would have been totally revenue neutral. I do not agree with this contention of the assessee as they themselves have admitted that the said waste and scrap was cleared without payment of duty. The fact remains that the said waste and scrap was chargeable to duty during the relevant period but they cleared the same without payment of duty of Rs. 7,96,040/=. 15. They have further sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m 06.09.95 to 16.01.97 which works out to Rs. 7,96,040/=. To that extent they had contravened the provisions as alleged in the show cause notice. Thus, the charges levelled against them are proved. 3. The Commissioner (Appeals) held against the assessee despite the assessee's plea that they were under the bona fide impression that no duty is payable on waste and scrap. The Commissioner passed the following order :- (i) I confirm the demand of Rs. 12,20,641/= leviable on the modvat inputs cleared without payment of duty. The said amount has already been paid by the assessee. (ii) I demand duty of Rs. 7,96,040/= on waste and s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d prior to the passing of the order by the Commissioner (Appeals) on the show cause notice adjudicated by the Deputy Commissioner, it was clear that there is no question of paying duty on removal of waste and scrap of plastic. On this bona fide plea, the assessee did not pay the duty on waste and scrap of plastic cleared by them. The Department, on the other hand, in the instant case, issued the show cause notice on 12.2.99 on the assessee invoking proviso to Section 11-A. The assessee, therefore, seriously contended that it was well within the knowledge of the Department that waste and scrap has been cleared without payment of duty based on the order of the Deputy Commissioner and, therefore, the assessee at no point of time had an intenti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... dated 15.9.95 that the waste and scrap of plastics removed from their factory during the said period were not dutiable. It is difficult to brush aside this plea of bona fide belief in the facts and circumstances of this case. It was only as late as on 8.5.2002 that the above Order-in-Original dated 15.9.95 was set aside by the appellate Commissioner (Order-in-appeal No.37/2002). Till then, the appellants had valid reason to believe that waste and scrap of plastics removed by them during the period 6.9.95 to 16.1.97 were not dutiable. In the case of Jaiprakash Industries (supra), the Hon'ble Supreme Court held that where the assessee had a bona fide doubt as to excisability of the goods during the period of dispute, the extended period ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the said order of the Tribunal, the Revenue is before this Court by filing the present appeal. 8. Heard the learned standing counsel appearing for the Revenue and the learned counsel appearing for the respondent/assessee and perused the documents available on record. 9. On a perusal of the order of the Tribunal, the facts, as is evident, make it clear that on and from 1.3.94, i.e., period post the order of the Deputy Commissioner of Central Excise dated 15.9.95, till the order in appeal No.37/02 dated 8.6.02, the assessee was under the bona fide impression that removal of waste and scrap does not attract duty. The Department had chosen not to issue notice pending appeal, for which failure thereof, they are not entitled to invoke the p....