TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 5
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....etc. They purchase old and used indigenous/imported vessels, ships, boats and other floating structures and after breaking them, obtain goods and various materials. During audit of their records, officers observed that the appellant during the period from January, 2012 to February, 2014 had cleared "Old and used Lead Acid Battery" without paying any excise duty by treating the same as non-excisable goods. After obtaining the details of clearances from them, the department issued a show cause notice dated 16.10.2014 proposing to recover Central Excise duty of Rs.10,810/- under Section 11A (4) of the Central Excise Act,1944 along with interest under Section 11AA and penalty under Section 11AC(1)(a) of the Central Excise Act,1944 read with Rul....
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....Circular No.345/61/97-CX dated 23.10.1997 issued by the CBEC wherein, it is specifically mentioned that, "Whether the items emerging during the course of ship breaking falling outside the ambit Section XV of the Schedule to the Central Excise Tariff Act, 1985 would be treated as excisable and chargeable to Central Excise duty" and further mentioned that "Director General of Inspection has conducted a study on this issue and a view has been taken that the goods and materials recovered during the course of ship breaking which are outside the ambit of Section XV of the Schedule to the Central Excise Tariff Act, 1985 are non-excisable goods as there is no entry in the Tariff which describes the act of obtaining these items as an activity of man....
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....eminath Fabrics Pvt. Ltd. reported in 2010 (256) ELT 369 (Guj.), * CCE, Rajkot Vs. Saibaba Ship Breaking Corporation reported in 2002 (140) ELT 135 (Tri-Mumbai), * Triveni Ship Breakers Vs. CCE, 2024 (18) CENTAX 250 (Tri-Ahmedabad) 4. We have considered the rival submissions. The short issue to be decided here is whether "Lead Acid Batteries" obtained from old and used ships, boats etc. are classifiable under Chapter heading 85.07 or Chapter heading 78.02 of the Central Excise Tariff Act, 1985? The department relies on Note 9 of Section XV to allege that old and used "Lead Acid Batteries" are basically meant for extracting Lead/ lead scrap and therefore, these should be classified under Chapter heading 78.02 and should be leviable to c....
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....) to support his case. The decision in the case of Triveni Ship Breakers relates to classification of used batteries wherein, classification matter was remanded to the Adjudicating Authority to reconsider the issue a fresh by going into all the claims by the appellant as regards the nature of the products. We find that the decision in the case of Saibaba Ship Breaking Corporation is primarily related to availability of Modvat credit on inputs such as fuel oil and food stuff on board. However, we find that para-13 of this order discusses that the items such as bunker, oil, stores, etc. are removed before actual ship breaking starts. This is so because presence of these items will endanger working of the Labour/ staff there. Relevant portion ....
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..... It would be not correct to say that this conclusion would apply with equal force to bunker, oil, stores, etc. Their removal is not an act of manufacture and no excise duty is liable to be paid on them. This was in fact the basis of the Tribunal's decision in Priya Blue Industries Ltd. & Others v. CCE (Appeals E/1194/2000 and Others [2001 (132) E.L.T. 381 (Tri. - Mumbai)]" 4.3 The above decision clearly emphasises that, " Considering that fuel and other stores necessarily required to be removed for the purpose of safety and efficient operation apart from the legal requirement of the Gujarat Maritime Board, how it could be said that these are the result of breaking up is beyond our capacity to understand. It would not be correct to say tha....