TMI Blog2011 (3) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Ltd., Doddaballapur (TAFE) are manufacturers of tractors and parts falling under Chapter 87 of Central Excise Tariff Act, 1985. Inspection of its records by the audit party of the Department had revealed that it had sent inputs for its final products to various job workers and that the job workers had not sent the excisable scrap generated in the course of job work to the assessee. TAFE had cleared a tractor of value Rs. 2,08,142/- wrongly availing complete exemption in terms of Notification No. 10/97-C.E., dt. 1-3-1997. After due process of law, the original authority confirmed the demand of duty of Rs. 13,772/- along with applicable interest in terms of Section 11AB read with Rule 57AH of the Central Excise Rules, 1944 (CER). He confirmed demand of Rs. 33,303/- being the duty due on the tractor cleared availing inadmissible exemption under Notification No. 10/97-C.E. The original authority also imposed penalty equal to the demands working out to Rs. 47,075/- under Section 11AC and Rule 57AH(2) of the CER. The impugned order sustained the above orders of the original authority. 2. The impugned order is assailed on the following grounds :- (a) Demand of duty on scrap not ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pushpam Pharmaceuticals Company v. Collector of CE, Bombay [1995 (78) E.L.T. 401 (S.C.)] in support of the claim that the proviso to Section 11A could be invoked only in cases where an assessee had withheld correct information deliberately to escape from payment of duty. It is argued that there was no such finding in the orders of the lower authorities. In Cosmic Dye Chemical v. Collector of C.E., Bombay [1995 (75) E.L.T. 721 (S.C.)] case, the Apex Court had held that proviso to Section 11A employed expressions like willful mis-statement or suppression of facts which meant mis-statement or suppression of facts with intent to evade payment of duty. Based on the above decisions, it is submitted that where failure to pay duty is not willful/deliberate or with intention to evade payment of duty, then it is not a case falling within the proviso to Section 11A of the Act; such a case would not be one of suppression or willful failure to pay duty with intent to evade. The failure to pay the differential duty had arisen due to a reasonable understanding of the law by the appellant. It was up to the Revenue to establish that the assessee had evaded the short paid duty willfully. This onus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended period of limitation could not be invoked in the instant case inasmuch as there was no intention on the part of the appellant to evade duty confirmed by the adjudicating authority and sustained in the impugned order. The appellants had acted under the bona fide belief that the Impugned clearances were entitled to the exemption availed. In terms of the notification, the benefit of exemption was available so long as the institution to whom the goods were cleared was duly certified to be an autonomous research institution by the Central Government. The appellate authority failed to appreciate that the adjudicating authority had confirmed the demand without rendering a findings as to whether there was any intention on the part of the appellant to evade the payment of duty confirmed. (d) Ld. Chartered Accountant for the appellant relied on the following decisions of the Tribunal :- (a) P.L. Haulwel Trailers v. CCE, Chennai [2002 (142) E.L.T. 204 (Tri. Chennai)] In this case, the appellants had removed one 12T payload single axle skeleton flat bed semi trailer in respect of which the Department had sought to deny the exemption availed under Notification No. 10/97 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad taken the view that such waste generated in respect of the appellant s Chennai factory was not excisable. The appellant had already paid duty on the waste in question as it was the practice of the assessee to discharge the liability on this account at regular intervals. It had paid the duty for the previous period. There was no intention to evade payment of waste which constituted 0.12% to 0.4% of the weight of the goods cleared (to job worker). As regards the exemption availed on the tractor with trailer cleared to NAL, he reiterated the claim in the light of the various judicial authorities. 3. Ld. Jt. CDR submitted that the scrap generated was classifiable under an appropriate entry in the tariff and duty demanded was payable. As regards the exemption to the tractor-cum-trailer cleared to NAL he submitted that it was for the departmental authorities to decide whether the goods were entitled to exemption or otherwise. The notification did not authorize heads of various institutions specified in the said notification to decide and certify which of the equipments, apparatus or parts and accessories thereof were entitled to the exemption extended under the said notification. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsorbed in the atmosphere or gets mixed with the mud to form industrial waste. In either case, the scrap generated is not commercially marketable. They have already discharged the duty due in dispute and did not contest the liability. They have produced an order of the Additional Commissioner of Central Excise dt. 22-9-1998 relating to their sister unit in Chennai dealing with duty liability of similar waste generated at the job workers place. In the said order, the Additional Commissioner had held that such scrap generated at the premises of the job workers may not be recoverable or capable of re-melting or rolling. They being borings and sweepings, such scrap would merit exclusion from the purview of waste and scrap covered under Chapter Heading 72.04. Allowances were to be made in respect of irrecoverable scrap before quantification and subjected to levy of duty. 6. In the instant case, the Original Authority accepted certificates produced by four job workers to the effect that the scrap involved was not marketable. However, such certificates were not produced in respect of the other job workers. The Commissioner did not treat the scrap generated at the premises of other job ..... 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