TMI Blog2010 (8) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... llant's factory was visited by the Jurisdictional Central Excise officers on 21st May 2002 and their records were checked, in course of which the following irregularities were noticed : (i) the lubricants used in the plant and machinery after use for some period of time become unfit for further use and the same are drained out and sold as waste oil. The department was of the view that this waste oil was chargeable to Central Excise Duty under Heading 34.03 of the Tariff but the same was cleared without payment of duty and thus duty amounting to Rs. 20,340/- has been short paid ; (ii) The appellant were sending cenvated inputs to their job workers for processing and the job workers as per the provisions of the Central Excise Rules were required to return, within the stipulated period, the processed inputs alongwith the waste. It was noticed that in respect of a number of consignments, the scrap had not been received back and the Central Excise Duty involved on the same was Rs. 4,27,326/- which appeared to be recoverable from them; (iii) In respect of a number of consignment, sent to job workers under job work challans the goods after processing had not been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvat credit on the damaged inputs which had not been used in the manufacturing process. However, he dropped the demand of Rs. 20,340/- in respect of waste oil and the demand of Rs. 8,50,966/- out of duty demand of Rs. 13,28,079/- in respect of cenvated inputs send to job workers, not returned back after processing within the stipulated period, as in course of hearing before the Commissioner (Appeals), the appellant produced the job work challans showing the return of the inputs after processing and the Cenvat credit involved in respect of such challans was Rs. 8,50,966/-. The Commissioner (Appeals) thus confirmed the duty/Cenvat credit demand of Rs. 10,12,281/- only and accordingly reduced the penalty to Rs. 50,000/- and upheld the interest liability only on the duty demand of Rs. 10,12,281/-. While the appellant have filed the appeal No. E/5701/04-EX against the Commissioner (Appeals)'s order challenging upholding of penalty and interest, the department has filed appeal No. E/5985/04-EX against the same order of the Commissioner (Appeals), challenging the setting aside of duty demand on waste oil and reduction of penalty to Rs. 50,000/-. The department in its appeal has also chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the appellant and that there is no merit in the department's appeal for seeking enhancement of the penalty and charging of the interest on the entire amount confirmed by the Additional Commissioner. 2.2 Shri B.K. Singh, the learned Jt. CDR, reiterating the grounds of appeal in the revenue's appeal, pleaded that the waste oil was correctly classifiable under Heading 34.03 of the Tariff and its duty demand has been wrongly dropped by the Commissioner (Appeals), that in this regard, he relies upon Tribunal's judgment in the case of Panama Petro Chem Pvt. Ltd. v. CC, Ahmedabad reported in 2003 (151) E.L.T. 670 (Tri. - Del.), that clearances without payment of duty of waste oil had not been declared by the appellant to the department, that the major chunk of demand is in respect of the cenvated inputs sent to the job workers for processing, which had not been returned, that even now in respect of a number of consignments sent to the job workers for processing, the proof of return of the same has not been produced, that the appellant were required to intimate to the department the non-return of the processed inputs and their failure to do the same would attract longer limitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grease treatment of textile material, leather, fur skin or other materials, but excluding preparations containing, as basic constituent, 70% or more by weight of petroleum oil or of oils obtained from bituminous minerals". The product in question - waste oil obtained by draining out used lubricants from the machinery after a long period of its use, does not answer to the description of the goods covered by heading 34.03. In view of this, we hold that there is no infirmity in the Commissioner (Appeals)'s order dropping the demand on the waste oil. 3.2 As regards the Cenvat credit demand of Rs. 13,28,079/- in respect of cenvated inputs sent to job workers for processing under job work challans, which according to the department, were not returned back within the stipulated period, we find that in course of hearing before the Commissioner (Appeals), the appellant were able to produce job work challans showing return of the inputs involving Cenvat credit of Rs. 8,50,966/- and on this basis only the Commissioner (Appeals) set aside the demand for this amount of Rs. 8,50,966/- out of total demand of Rs. 13,28,079/-. The department does not challenge the authenticity of the job w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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