TaxTMI 
TaxTMI 
2007 (10) TMI 3
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....ment dated 28-11-2001 CEGAT allowed the appeal filed by the respondent holding that waste/scrap/ parings of paper board which are generated during the process of manufacture of paper and paper board is nothing new, distinct in name, character and use for the purpose of levy of duty. Therefore, it was held that no duty was chargeable. 2. Background facts in a nutshell are as follows: During investigation of the accounts of M/s Wimco Ltd. Bareilly, it transpired that the respondent was using paper and paper board for the manufacture of printed paper board boxes. During the course of manufacture of such boxes, waste/scrap/parings are generated, it was alleged that this waste was classifiable under Chapter sub-heading 4702.90 of Central Excis....
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....t was also submitted that longer period is invocable and substantial part of the demand was beyond a period of six months; there was no evidence of any suppression or mis-statement; there was a bona fide belief that waste generated in the process of manufacture of match boxes was not dutiable as it arose out of duty paid paper and card board. Commissioner of Central Excise confirmed the payment of duty amounting to Rs. 23,20,000/- imposed penalty of identical amount and also directed payment of interest at the appropriate rate under Section 11AB of the Central Excise Act, 1944 (in short the 'Act'). 3. The stand of the respondent before the CEGAT was that there was no manufacture inasmuch as whatever is used is paper and paper board and wh....
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....ntinue to be paper and paper board when they appear as waste/scrap/parings. Charging of duty tantamounts to charging of duty on the same product twice. CEGAT also noted that in the instant case there is no value addition. 7. In support of the appeal, learned counsel for the appellant submitted that effect of classification list filed under Rule 173B has not been considered and there is a sale of waste/scrap/parings. 8. The Commissioner observed that the benefit of exemption, under Notification No. 89/95 dated 18-5-1995 is not available. 9. Reference was made to following observations of the adjudicating authority: "I find that the case has not been contested on merits at all by the party. The SCN to the party was issued on the allegatio....
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....nsel for the respondent supported the order of the CEGAT. 11. In Commissioner of Central Excise v. Indian Aluminium Co. Ltd. [2006 (203) E.L.T. 3 (S.C.)] it was observed inter alia as follows: "18. The entry in question does not contain any legal fiction. It does not say that any residue having more than a certain percentage of the metal would be deemed to have been manufactured or would be excisable. Records maintained by Respondent whereupon the Revenue has relied upon may be a relevant factor to identify 'dross' as a marketable commodity but then percentage of the metal in dross may not by itself make it excisable, if it is otherwise not. An article is not exigible to tax only because it may have some saleable value. 19. It may be tha....
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....y or not. Under the Tariff, prior to its amendment in 1985, it had been consistently held that "spent earth" was not liable to duty. However, with the enforcement of new Tariff in 1985, a conflict arose between various benches of the Tribunal. Some benches held that "spent earth" was still not excisable, whereas other benches held that, as it now stood included by a specific sub-heading, it became excisable. In view of these conflicting decisions, the matter was placed before the larger Bench of the CEGAT which by the impugned judgment has held that "spent earth" was still not dutiable. Hence these appeals. 3. The only question for consideration for us is whether a goods becomes excisable merely because it falls within a tariff item. After....
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.... Wollen & Silk Mills (P) Ltd., Amritsar v. Collector of Central Excise, Chandigarh, [1999 (4) SCC 466]. In this case the question was whether excise duty was to be paid on dyed worsted woolen yarn made from duty paid worsted woolen grey yam. It was argued that there was no manufacture. The Court however held as follows: "Admittedly both "dyed yarn" and "grey yarn" are covered by two separate distinct heads of tariff items with different duty. So this itself recognizes them to be two different goods with separate levy. In this view of this it cannot be urged that there is no manufacture of "dyed yarn" from the "grey yarn". Undoubtedly this authority appears to support the contention which is raised. 6. However, it appears to us that the o....