TaxTMI 
TaxTMI 
2022 (2) TMI 731
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....sposed of to scrap dealers. 3. Eight show cause notices were issued to the appellant alleging that it had cleared "excisable goods" namely scrap during the period from February 2013 to June 2017 without payment of duty. The show cause notices also sought to impose interest and penalty on the appellant. The appellant filed a detailed reply to the show cause notices mentioning therein that it removed petroleum coke ash, used carbon, PVC shell, sugar juice and other wastes as scrap and excise duty could not have been imposed. 4. The Assistant Commissioner confirmed the demand and imposed interest with penalty. 5. An appeal was preferred by the appellant before the Commissioner (Appeals). Before the Commissioner (Appeals), the appellant pointed out that though in the appellants' own case the Commissioner (Appeals), by order dated March 28, 2017, had rejected the appeal on the ground that the appellant was required to pay central excise duty on the said waste and scrap products that were cleared, but the appellant had filed an appeal before the Tribunal to assail the said order and the Tribunal by order dated March 14, 2018 allowed the appeal holding that the scrap material did....
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....ugned order. 9. The submissions advanced by the learned counsel appearing for the appellant and the learned authorised representative appearing for the Department have been considered. 10. The issue involved in the present appeal is with regard to levy of central excise duty on waste and scrap products cleared by the appellant and this was precisely the issue that was involved in the earlier Appeal Nos. 51560 to 51563 of 2017 (M/s Varun Beverages Limited Vs. CCE & ST, Jaipur-I) filed by the appellant, which appeals were allowed by the Tribunal on March 14, 2018. The relevant portion of the earlier decision of the Tribunal is reproduced below: "We note that the appellant were engaged in the manufacture of sweetend / non-sweetend assorted water. During such manufacture these various assorted scrap arise which in any case cannot be considered as products arising out of a manufacturing process. The view of various judicial pronouncement on this issue has been consistent and clear. Such scrap materials arising as incidental products and even if they were sold for a consideration cannot be considered as excisable products. In this connection, we refer to the decision of th....
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....ding a product to be the result of manufacture inasmuch as the same not only relates to the marketability of the product but also the "criteria of manufacture" is still required to be satisfied". 5. We also note that the Hon'ble Supreme Court in the case of Union of India vs. Ahmedabad Electricity Co. Ltd. -2003 (158) ELT 3 (SC) examined the scope of excisability on the basis of marketability. The Apex Court held that only on the fact that the goods were marketed, excise duty cannot be automatically imposed. The Apex Court held that for being produced and manufactured in India the raw material should have gone through the process of transformation into a new product by skilful manipulation. Excise duty is an incident on manufacturer. The onus to show a particular goods emerged due to manufacture is on the Revenue. The Apex Court held that coal ash (cinder) was not liable to Excise duty. 6. In the present case, we note that the various goods on which the Revenue seeks to collect Excise duty are all, admittedly, products incidentally arising during the manufacture of finished goods on which in any case, the appellant is discharging duty. These scrap material are not....
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....es in the administration of justice based as it is in this country on a hierarchy of courts. If a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exercise of its appellate powers, the result will be chaos in the administration of justice and we have indeed found it very difficult to appreciate the process of reasoning by which the learned Judicial Commissioner while roundly condemning the respondent for refusing to carry out the directions of the superior tribunal, yet held that no manifest injustice resulted from such refusal. It must be remembered that the order of the Tribunal dated April 22, 1954, was not under challenge before the Judicial Commissioner. That order had become final and binding on the parties, and the respondent could not question it in any way. As a matter of fact the Commissioner of Income-tax had made an application for a reference, which application was subsequently withdrawn. The Judicial Commissioner was not sitting in appeal over the Tribunal and we do not think that in the circumstances of this case it was open to him to say that the order of the Tribunal was wrong and, therefore, there was no injus....
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....llate directions should be taken as binding and followed. It is appropriate to usefully recall certain observations of the House of Lords in Broom v. Cassell & Co.(1) Therein Lord Hailsham, L. C. observed: "The fact is, and I hope it will never be necessary to say so again, that in the hierarchical system of courts which exist in this country, it is necessary for each lower tier, including the Court of Appeal, to accept loyally the decisions of the higher tier." Lord Reid added: "It seems to me obvious that the Court of Appeal failed to understand Lord Delvin's speech but whether they did or not, I would have accepted them to know that they had no power to give any such direction and to realise the impossible position in which they were seeking to put those judges in advising or directing them to disregard a decision of this House." Lord Diplock observed at p. 874 of the Reports: "It is inevitable in a hierarchical system of courts that there are decisions of the Supreme appellate tribunal which do not attract the unanimous approval of all members of the judiciary. When I sat in the Court of Appeal, I sometimes thought the House of L....
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....eals) and the other of the Tribunal. The High Court has, in our view, rightly criticised this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate heirarchy. It cannot be too vehemently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities; The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If ....