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2016 (11) TMI 271 - CESTAT MUMBAI

2016 (11) TMI 271 - CESTAT MUMBAI - TMI - Demand - Whether the appellant is liable to pay Central Excise duty on the waste of band aid generated in the hands of the job worker - Rule 21 Central Excise Rules 2002 - Held that: - the finished products Band-Aid can be considered finished product only when they packed and certified as fit for dispatch to the market, on approval of the quality control section of the appellant - shredded Band-Aid may not become an excisable product as it is not a manuf .....

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0, hence in the absence of any classification of the product, demand of the duty is unsustainable - Appeal allowed. - E/1740/05 - A/90559/16/EB - Dated:- 25-8-2016 - Mr. M.V. Ravindran, Member (Judicial) and Mr. C.J. Mathew, Member (Technical) For Appellant : Shri Rohan Shah, Advocate with Shri J.H. Motwani, Advocate Shri Anay B and Ms. Tejus Golecha, C.A. For Respondent : Shri N.N. Prabhudesai, Supdt. (AR) ORDER This appeal is directed against Order-in-Appeal No. AT/58/M-III/46/2005 dated 25.02 .....

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nd before clearance of the same as finished products, certain manufacturing defect is noticed which renders the goods unmarketable, such defective Band-Aid are shredded and sent for incineration. Appellant outsourced the activity of the quality inspection by sending Band-Aid under job work challan to the job worker. Job worker after completion of the inspection of the quality of the goods packs them and sends it back to appellant along with the shredded unacceptable Band-Aid. The said Band-Aid i .....

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se and also Rule 21 of Central Excise Rules 2002 submit that the Rule 21 is not applicable in the case in hand as these shredded waste of Band-Aid is not an excisable goods liable to Excise duty hence there was no question of seeking any remission. He would submit that undisputedly Band-Aid falls under chapter 30 and the shredded waste of such products needs to be classified and there is no heading of waste in chapter 30, hence in the absence of specific tariff entry, the shredded waste of Band- .....

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e cites the following decisions:- a) Union of India v. DSCL Sugar Ltd. - 2015 (322) ELT 769 (SC) b) Union of India v. Indian Aluminum Co. Ltd. - 1995 (77) ELT 268 (SC) c) Modi Rubber Ltd. - 1987 (29) ELT 502 (Del.) 6. Learned departmental representative would reiterate the findings of the lower authorities. He would submit that the shredded waste of Band Aid are excisable product inasmuch appellant has dispatched the finished goods to the job worker which is not permitted as per the provisions o .....

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be discharged. 7. We considered the submissions made at length by both sides. 8. In our view, both the lower authorities have erred in appreciating the correct position of the law in the case in hand. It is undisputed that the product Band-Aid is falling under chapter 30. As per the provisions of the drugs and cosmetics Act, every product which is a P or P medicament, needs to be checked for the quality of the goods to be declared as fit to be used for consumption by human being. In pursuance to .....

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