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2016 (8) TMI 938 - CESTAT NEW DELHI

2016 (8) TMI 938 - CESTAT NEW DELHI - TMI - Demand in terms of Notification No. 22/03-CE dated 31.03.2003 - Invokation of extended period of limitation - willful misstatement/ suppression of facts - waste and scrap arisen in the course of production processing or in connection therewith - Held that:- the appellant had all along held that it considered the impugned waste and scrap as not subject to duty. Further the SCN itself concedes that the Revenue was not confirmed whether such waste and scr .....

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s not equivalent to collusion or willful misstatement or suppression of facts. The main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or wilful mis-statement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso. Hence, the demand is unsustainable and extended period of limitation .....

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lowing categories, namely, of the packing material such a Empty MS drums, Empty Plastic Carboy, MS Tin and other packing materials in which oil/grease, dyes and chemicals had been received and waste and scrap of electrical fittings / pipe fittings accessories, tubelight choke, comber spares, mechanical parts of ring frame can be fairly stated as arisen in the course of production processing or in connection therewith and therefore impugned duty is chargeable in terms of Notification No. 22/03-CE .....

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al products of the appellant. Similarly, waste and scrap of electrical fittings/ pipe fittings accessories, tube light choke, comber spares mechanical parts of ring frame etc. are also not generated during the course of production of processing. (ii) In the SCN, no classification of such scrap is indicated which is necessary for arriving at the rate of duty. There was no willful misstatement or suppression of facts and there is no evidence in the SCN on the basis of which this allegation can be .....

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held by the Adjudicating Authority such waste and scrap can be said to be generated during the process of manufacture of production and that paras 6 & 8 of the Notification support his contention. 5. We have considered the contentions of both the sides. 6. Notification No. 22/2003-CE inter alia essentially requires payment of duty on waste and scrap which arise out of production, manufacture, processing or packaging of the goods by using the material received duty free under that Notificatio .....

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eceived by manufacturer could not be treated to be a waste arising out of the processing of the inputs for which credit had been taken and therefore no duty would be leviable on such drums/ barrels/ containers cleared from the factory. Although, the said judgment was given with reference to Rule 57F of the Central Excise Rules 1944, the ratio thereof is clearly applicable to the present case also. The contention of the Ld. DR that such waste and scrap was of packing material which is durable and .....

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and scrap was out of articles which were received duty free under the said Notification. Punjab & Haryana High Court in the case Ballarpur Industries Ltd. vs CCE (supra) followed the Supreme Court judgment in the case of West Coast Industrial Ltd. to hold that there is no provision of law which shows that scrap of iron and steel, copper, brass or plastic waste which is packing material would be exigible items. Para 7 & 8 of the Notification No. 22/2003-CE cited by the Ld. DR in no way a .....

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erial. Since no separate records was maintained, hence it cannot be confirmed whether the waste and scrap of indigenous or imported material was cleared of the entire scrap/ waste are to be treated as generated out of imported material, on which a higher rate of duty is applicable. 6. In this regard, the statement of authorized signatory Sh. Rajesh Garg, General Manager (Commercial) was recorded on 04.08.2006, wherein he has reiterated that no separated records were maintained for indigenous as .....

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