TaxTMI 
TaxTMI 
2004 (9) TMI 176
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....nvoices which were used for clearing metal scraps. It was noticed by them that removal of scraps had been carried out under separate set of invoices. It was also found on investigation that the appellants have purchased various grades of virgin metals like steel, stainless steel, aluminium etc. to the tune of Rs. 3.34 crores from M/s. Hindustan Corporation and M/s. Hindustan Hardwares alone, who are two of their suppliers. The officers also noticed that there were two maintenance workshops and one Electrical workshop within the factory premises of the appellants and they further noticed that machines were used for mechanical working such as lathes, drilling machines, boring machines, scaring machine, welding machine, shaping machine and hacksaw cutting machine. As a follow up action, statement was obtained from Shri M.S. Shenbogue, General Manager (Maintenance), on 27-3-1998 wherein he stated the objectives of the workshops and also detailed out the various activities like pressing, gas cutting, grinding, welding and melting zinc ingots etc. and also the nature of metals used in the workshops. He also stated that generally rewinding of electric motors is done through outside agenci....
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....y the Department is also not correct. (f) The Hon'ble Supreme Court in the case of UOI v. Indian Aluminium Co. reported in 1995 (77) E.L.T. 268 (S.C.) has held that refuse, ashes, rubbish emerging in the course of manufacture are not excisable. It was also held therein that rubbish can be sold but that does not become a marketable commodity. (g) The department was aware of the clearance of scrap generated by the appellants as the appellants had clearly indicated in their letter that MS scrap, cast iron, etc. were cleared during the year 1991-94. Therefore, the allegation of the department that the appellants have suppressed material fact from the department is not correct. Consequently, longer period of limitation for demand of duty cannot be invoked. Demand of duty for the larger period is not in consonance with the law laid own by the Hon'ble Supreme Court in the case of Tamil Nadu Housing Board v. CCE reported in 1994 (74) E.L.T. 9 (S.C.) = 1994 (55) ECR 7 (SC) wherein it was held that when the law requires that an intention to evade payment of duty, then it is not mere failure to pay duty. Similarly in the case of Padm....
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....cutting, grinding, welding and melting zinc ingots. He has also stated that apart from that, in emergency, motor winding was also undertaken in the factory. The learned JDR also invited our attention to the statement recorded from S.D. Seshachalam, Manager (Excise), on 31-3-1998, wherein he has clearly stated that waste emerged was, as a result of mechanical working such as turning, grinding, threading, drilling etc. and that the appellants have not filed any declaration under Rule 173B of the CE Rules, 1944. The learned JDR, in the face of the above statement recorded from two senior officers of the appellants, submitted that the impugned order is perfectly in order and the appeal is devoid of merits. He, therefore, prayed for rejection of the appeal. While winding up his arguments, he pressed into service the decision of the North Regional Bench in the case of Ranjeev Steel Ltd. v. CCE, Chandigarh reported in 2003 (154) E.L.T. 450 wherein it is held that waste and scrap arising out of mechanical working of iron or steel are liable to duty, and not waste and scrap as a result of wear and tear of ingots mould. 5. We have carefully considered the rival submissions and gone throug....
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....ails about the generation of scrap, they have not placed the required information. We also observe that the appellants are working under Self-Removal Procedure Scheme (SRP) and lot of faith is reposed on the assessee to maintain all the records correctly, which they have not done in the instant case. Strong reliance was placed by the appellants in the judgment of the Supreme Court in the case of Tamil Nadu Housing Board v. CCE reported in 1994 (74) E.L.T. 9 (S.C.) = 1994 (55) ECR 7 (SC) wherein it was held that when the law requires that an intention to evade payment of duty, then it is not mere failure to pay duty. Reliance was also placed in the case of Padmini Products v. CCE reported in 1989 (43) E.L.T. 195 (S.C.), wherein it was held that in order to make a demand for a period beyond six months, and up to a period of five years, something other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knows otherwise, is required, before it is saddled with any duty liability, beyond the period of six months. We observe that in the present case, intention to evade payment of duty is clea....
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.... Hacksaw cutting machine : 1 No. Hydraulic press : 1 No. Crane (Manual) : 1 No. No. of Workers : 3 Engineers/Supervisors : 65 workers. He has also stated that approximate power used for both the works is 160 HP. His statement is corroborated by the statement of Shri S.D. Seshachalam, Manager (Excise), dated 31-3-1998 wherein in he had clearly stated that the waste and scrap were generated by the mechanical working such as turning, grinding, threading, drilling etc. By no stretch of imagination, it can be held that the two senior officers of the appellants could have given wrong statements. Further, it is not the case of the appellants that there was any threat or coercion while obtaining the statements. Further, there is also no retraction of the statements of these officers. Their statements, therefore, strengthens the case of the Revenue that the waste and scrap was generated by mechanical working on the virgin metals valued at Rs. 3.34 crores and not the waste which has arisen due to wear and tear or revamping etc. as claimed by the appellants. The burden was on the part of the app....