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2022 (6) TMI 709 - Central Excise
Head Note / Extract:
Removal of scraps - authorized removal or not - permission under Rule 57F (2) of the Excise Rules for reprocessing of inputs required from the applicant authorities before removal of various types of scraped cables and lead scraps for reprocessing to the factory of job workers or not - loss which waste and scrape of copper arising during reprocessing has to be returned to the factor or not - extension of time if loss not returned within 60 days - suppression and willful mistake or not - invocation of extended period of limitation - HELD THAT:- The order passed by the Tribunal was just and proper and does not call for any interference. Extended period of limitation - HELD THAT:- To invoke the power under Section 11A that is to invoke the extended period of limitation there should be a clear finding of willful mis-statement or suppression on the part of the assessee with an intent to avoid payment of duty. On perusal of the show-cause notice, it is found that there is absolutely no such allegation against the assessee and this aspect of the matter is not disputed by the revenue. The allegation against the assessee was that of not properly maintaining the register required to be maintained in terms of Rule 57F(2) of the Rules. If such is the allegation against the assessee, the adjudicating authority committed a serious error in invoking the power under Section 11A of the Act - A reading of the show-cause notice clearly shows that the information was gathered from the registers and challans maintained by the assessee and the show-cause notice is not on account of any discovery of new facts by the department either by conducting an inspection or based on intelligence. Therefore, the Tribunal was right in holding that the extended period of limitation could not have been invoked by the authority. Non-payment of duty of waste and scrap - HELD THAT:- The decision of the Tribunal in FINOLEX CABLES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, PUNE [1995 (4) TMI 190 - CEGAT, NEW DELHI] will clearly apply and support the assessee’s case, where it was held that waste and scrap of wires and cables are not excisable goods and the question of their classification under CETA, 1985 does not arise. The learned Advocate appearing for the respondent also placed reliance of the decision of the Tribunal in CCE MUMBAI VERSUS CHEMICAL PROCESS EQUIPMENT PVT. LTD. [2018 (1) TMI 47 - CESTAT MUMBAI] wherein it was held that duty proposed on aluminium scrap is not sustainable. The decision in the case of ITEL INDUSTRIES LTD. VERSUS ASSISTANT COMMISSIONER OF CENTRAL EXCISE, DIVISION-I, PALAKKAD [2011 (8) TMI 621 - KERALA HIGH COURT] relied on by the revenue is clearly distinguishable on facts where the Court found a clear infraction of the procedure required to be followed / adopted under Rule 57A of the Act. Therefore, the said decision will not render any assistance to the case of the revenue - In the instant case, there is no intermediary product such as cable scrap as the essential character of the telecommunication cables is that it should be capable of conducting electricity. If it fails such a test then it qualifies to be termed as scrap. As already pointed out, there was no allegation of any willful mis-statement or suppression of fact by the assessee with an intent to avoid payment of duty and therefore, the power under Section 11A of the Act could not have been invoked by the authority. The order passed by the Tribunal does not call for interference - appeal dismissed - decided against Revenue.