2013 (10) TMI 400 - AT - Central Excise

Excisability of Scrap of Wires and Cables - Marketability - Amended provisions of Section 2(d) Held that - The contention of the Revenue is that after amendment to the definition of excisable goods prescribed under section 2(d) of the Central Excise Act earlier judgements would no more become good law. Prima facie we do not agree with the contention of the Revenue inasmuch as the applicability of the amended provision has to be analyzed in the context. It is possible only after an interpretation of the earlier provision vis- -vis the present one so as to arrive at a conclusion that whether the said amendment is applicable or otherwise. - Prima facie case is against the assessee. Application u/s 35F of the Act Held that - Following INDU NISSAN OXO CHEMICALS INDUSTRIES LTD. Versus UNION OF INDIA 2007 (12) TMI 220 - SUPREME COURT OF INDIA and METAL BOX INDIA LTD. Versus COMMISSIONER OF CENTRAL EXCISE MUMBAI 2003 (4) TMI 111 - SUPREME COURT OF INDIA - Section 35F of the Excise Act was pari materia with Section 129E of the Customs Act 1962 - it was not possible to hold that CESTAT had committed any error in law while passing the impugned order - In absence of any legal infirmity no interference was called for in the order. Waiver of Pre-Deposit - The contention of the learned Counsel for the petitioner that by dint of the fact that the petitioner was registered as a sick unit with the BIFR the petitioner was entitled to full waiver of the amount of pre-deposit does not merit acceptance - no infirmity can be found in the impugned orders of the Tribunal so as to warrant any intervention by this Court Keeping in view the applications filed under Sec.35F of CEA, 1944 and also keeping in view the interest of Revenue -the applicant was directed to deposit of 25% - upon such submission rest of the duty to be waived till the disposal.

Summary

Issues:
Waiver of pre-deposit of duty and penalty on scrap of wires and cables generated during manufacturing process.

Analysis:
1. The applicants sought waiver of pre-deposit of duty and penalties totaling a significant amount related to the sale of scrap generated during the manufacture of insulated electric wires and cables. The applicants argued that the scrap should not be considered excisable goods based on previous rulings and consistent observations by various authorities. They cited a judgment by the Tribunal in their favor and contended that no duty is payable on the scrap. The applicants also highlighted their negative net worth and being under B.I.F.R. to support their plea for no deposit requirement.

2. The Revenue, on the other hand, opposed the waiver, emphasizing the amendment to the definition of excisable goods under the Central Excise Act post-2008. The Revenue argued that the scrap in question was liable for excise duty, especially since the applicants had availed CENVAT Credit on duty-paid scrap but failed to discharge the duty or reverse the credit while clearing the goods. The Revenue referred to various judgments supporting the view that mere pendency before B.I.F.R. is not sufficient grounds for complete waiver of pre-deposit.

3. The Tribunal considered the arguments from both sides and reviewed the records. It noted that the issue of excisability of the scrap had been previously decided in favor of the applicants by the Tribunal itself. The Tribunal found no material to prove that the scrap was marketable or excisable, following precedents and the onus on the Department to establish marketability before imposing excise duty.

4. Despite the Revenue's contentions regarding the amendment to the excisable goods definition, the Tribunal disagreed with the Revenue's interpretation. It stated that a detailed analysis was required to determine the applicability of the amendment. The Tribunal acknowledged the Revenue's concerns about non-discharge of duty on the scrap received with CENVAT Credit but upheld the principle that being under B.I.F.R. does not automatically warrant a full waiver of pre-deposit. The Tribunal referred to relevant judgments, including those by the Supreme Court and High Courts, emphasizing the need to balance the interests of the applicant and the Revenue.

5. Ultimately, the Tribunal directed the applicant to deposit 25% of the total dues within a specified period, after which the balance amount would be waived, and recovery stayed during the appeal's pendency. Failure to comply would lead to dismissal of the appeals. The Tribunal's decision was based on established legal principles and considerations of the interest of Revenue, as outlined in the judgments cited during the proceedings.