TaxTMI 
TaxTMI 
2022 (6) TMI 709
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....ob workers? (ii) Whether such removal was made in an unauthorized manner? (iii) Whether the loss which waste and scrape of copper arising during reprocessing has to be returned to the factor or if not within a period of 60 days or extended time the duty leviable thereon has to be paid? (iv) Whether the demand of the applicant was barred by the laws of limitation when a specific finding about suppression and willful mistake has been made in the Order-In-Original dated 30th March, 1992? 3. We have heard Mr. K.K. Maiti, Learned Senior Standing Counsel for the appellant and Mr. Rohit Das, Learned Advocate assisted by Ms. Kiswhar Rahman, learned advocate for the respondent:- 4. The Collector of Central Excise, Bolpur, Commissionerate, issued a show cause notice dated 16.05.1991 calling upon the respondent/assessee to show cause as to why the amount of Rs. 1,32,42,800.02/- should not be recovered from them in terms of Section 11 A of the Act and why penalty should not be imposed under Rule 209 read with Rule 173 of the Central Excise Rules 1944. The allegation in the show cause notice is that during the period from November 1986 to March 1990, the assessee had removed the total q....
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....% of Antimony which is also imported through MMTC and since the assessee does not have facility for mixing lead with antimony, the imported lead and antimony are given to fabricators/processers to carry out the process of mixing. It was further stated that during the course of manufacture of telecommunication cables as well as at the time of drawing of copper wires finer than 14 SWG from copper rods scrap of various types are generated and they send the scrap to fabricators/processers on job charges basis for recovery of copper which is used again for manufacture of their final product namely the telecommunication cables. It was submitted that such procedure was adopted by the assessee ever since 1962 and after the introduction of MODVAT Scheme they have opted for availing of MODVAT from 1986 in terms of Rule 57 G (I). Further the assessee stated that they have applied to the jurisdictional Assistant Collector of Central Excise, Asansol Division in the prescribed form from time to time for permission to remove inputs or partially processed goods under Rule 57 F (2) and/or Notification No. 214/1980 dated 25.03.1986 as amended from time to time. Based on such application, permission ....
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....paid the Central Excise duty on waste and scrap. 6. With regard to the short receipt of various types of cable scrap, it was stated that the shortage is due to invisible and melting loss and such loss cannot be recovered and no duty is payable for such shortage. Further waste cannot be considered to be excisable and therefore no duty can be levied on the same, similar was the stand taken in respect of short received of cables bars/rods. With regard to the allegations of removal of lead scrap, the assessee pointed out that they had applied to the Assistant Collector to avail the concession provided under Rule 57 F (2) and permission was granted to them. Further merely for non-compliance of the procedural formality, duty cannot be demanded when the inputs were returned from the processers after reprocessing and they had received the recoverable quantities of the goods mentioned in their purchase order. Further it was stated that the show cause notice was barred by limitation and the ingredients required to invoke power under Section 11 A (1) of the Act was absent and therefore such power could not have been invoked. The adjudicating authority namely the Assistant Collector, Central ....
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.... clearly support the case of the assessee and has drawn out attention to the relevant paragraphs of the said judgment. Reliance was also placed on the decision of the Hon'ble Supreme Court in Union of India & Others Versus Hindustan Zinc Ltd. (2015) 15 SCC 312. 10. After we have elaborately heard the learned Counsels for the parties and carefully perused the materials placed on record, we have no hesitation to hold that the order passed by the Tribunal was just and proper and does not call for any interference. We support such conclusion with the following reasons. Firstly, to invoke the power under Section 11A that is to invoke the extended period of limitation there should be a clear finding of willful mis-statement or suppression on the part of the assessee with an intent to avoid payment of duty. On perusal of the show-cause notice we find there is absolutely no such allegation against the assessee and this aspect of the matter is not disputed by the revenue. The allegation against the assessee was that of not properly maintaining the register required to be maintained in terms of Rule 57F(2) of the Rules. If such is the allegation against the assessee, the adjudicating author....
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.... that is not much used in central excise assessment; it applies to copper aluminium, iron, plastic, paper; it is no name to assess a product by; waste, scraps and rejects are not names of goods but names of non-goods, materials that could have been but did not become prime goods." 6. The Tribunal, thereafter, considered the Supreme Court decision in the case of Khandelwal Metal & Engg. Works. v. U.O.I. - 1985 (20) E.L.T. 222 and noted that the Supreme Court said that the production of waste and scrap was a necessary incident of the manufacturing process. Following then the ration of Delhi High Court's decision in the Modi Rubber case (supra), the Tribunal held as follows in para 15 of its order to say that waste or scrap will not be dutiable unless specifically covered by the entry in the Tariff Schedule: "In 1987 (29) E.L.T. 502 (Del.) (Civil Writ Petition No. 214/1982, decided on 8-12-1986) re : Modi Rubber Limited, Modi Nagar v. P & Another v. U.O.I. & Others, the High Court at New Delhi dealt with just this problem. The waste and scrap of rubber tyre products were assessed by the department under Item 68. The Court noticed that Item 15A has specific heads for waste and scra....