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1996 (10) TMI 258 - AT - Central Excise
Issues:
1. Whether duty was demandable on tin containers obtained under Rule 192. 2. Whether the damaged tin containers can be considered as wastage under Rule 195. 3. Whether the damaged tin containers are eligible for remission of duty under Rule 196. Analysis: 1. The appeal was filed challenging the findings of the 1d. Commissioner (Appeals) upholding the duty demand on tin containers obtained under Rule 192 for packing ghee. The Department alleged non-utilization of non-duty paid containers as prescribed in Rule 192. The appellants argued that the demand was based on audit objection, illegal, and unsustainable. They cited a tribunal judgment and contended that duty should only be demanded on goods obtained under Rule 192 if not accounted for as per Rule 196. The A.C. upheld the demand, stating that losses shown in storage justified the demand. The appellate tribunal found that the damaged containers were eligible for remission under Rule 196, setting aside the duty demand. 2. The crucial question was whether the damaged tin containers could be classified as wastage under Rule 195. The tribunal analyzed Rule 195, which pertains to the disposal of refuse of excisable goods, and Rule 196B, which deals with defective or damaged excisable goods. It was established that the damaged containers fell under Rule 196B and were eligible for remission under Rule 196 if proven to be damaged in storage/handling. The tribunal determined that the damaged containers qualified for remission as the damage occurred during handling, not due to improper storage. 3. The tribunal examined the satisfaction of the Assistant Collector regarding the damage to the containers. It was noted that the A.C. relied on Column (7) of RT 11 return to determine the damage during storage/handling. The tribunal disagreed with the appellants' argument that Rule 195 was relevant for disposal, emphasizing that Rule 196B governed the handling of damaged containers. Consequently, the tribunal allowed the appeal, setting aside the duty demand and ruling that the damaged tin containers were eligible for remission under Rule 196B.
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