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TMI Blog2023 (7) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration received by the appellants in the form of credit notes from M/s. Indrox Global Pvt. Ltd. (hereinafter referred to as "IGPL") for sale of Ferric Oxide by IGPL, which emerged through chemical reaction of Waste Pickle Liquor, (generated during the course of manufacture of finished goods in the factory of the appellants) admittedly supplied by the appellants to the said IGPL, is required to be added to the transaction value as per Rule 6 of Excise Valuation Rules, 2000? 3. The relevant facts leading to the filing of instant Appeal are stated in brief as follows. The appellants are engaged in manufacture of Steel articles. To remove impurity and rust 'pickling process' is carried out which resulted in generation of Waste Pickle Liqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unting to Rs.7,02,413/- alongwith EC & HEC and interest paid by the appellant on 12.8.2008 during the course of investigation and the same was culminated into the Adjudication Order i.e. Orderin- Original dated 29.1.2010 by which the demands raised in the show cause notice were confirmed alongwith interest and penalty and appropriation of amount deposited during investigation was also confirmed. 4. Learned counsel for the appellants submit that during the course of manufacture of the finished products i.e. Galvanised Steel pipes, to remove impurity and rust accumulated on the raw material, the process of pickling is carried out on the raw material i.e. steel with Hydrochloric Acid to remove the impurities and due to which WPL emerged which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record. For ease of reference Rule 6 ibid is reproduced hereunder:- "Rule 6. Where the excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4 of the Act except the circumstances where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly from the buyer to the assessee." Section 2(d) of the Central Excise Act, 1944 is as under:- "2(d). "excisable goods" means goods specified in the Fourth Schedule as being subject to a duty of excise and includes salt; Explanation.- For the purpose of this clause, "goods" includes any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere issued by IGPL to the assessee therein and differential duty was demanded from the assessee by considering it as additional consideration received in terms of Rule 6 ibid, this Tribunal in the matter of M/s. TATA Steel Ltd. vs. CCE, 2019-TIOL-3946- CESTAT-MUM has held that WPL is not an excisable goods therefore Rule 6 of Valuation Rules, 2000 has no application and the question of undervaluation does not arise. The relevant paragraphs of the said decision are reproduced hereunder:- "xxx xxx xxx 2. The Appellants are engaged in manufacture of various Wires and are availing Cenvat Credit on inputs, capital goods and input services. They receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuing credit notes to them. As per the department, during the period October, 2008 to September, 2009 Indrox have issued various credit notes amounting to Rs.10,091/- to the appellants which is nothing but additional consideration received in terms of Rule 6 of Valuation Rules, 2000 and as such the clearance value i.e. Re.1/- per M.T. appears to be an undervaluation and therefore the department issued show cause notice dated 30.10.2009 to the Appellants demanding Rs.2,115/- being the differential duty with interest and penalty. The said demand was confirmed by the Adjudicating Authority with equal penalty vide Order-in-Original dated 4.8.2010. First Appeal filed by the Appellants was rejected by the Commissioner (Appeals), Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficacy since it becomes unfit for further pickling, it has to be discarded. The aforesaid decision of the Tribunal was challenged by Revenue before the Hon'ble Supreme Court but the same was dismissed by the Hon'ble Supreme Court as reported in 1995(77)ELT 21(SC). From the aforesaid decision it is evident that WPL is not an excisable good and is only a waste generated during the manufacture of another product. In the instant matter also WPL emerges during the pickling process whereby hot rolled coils are passed through the hydrochloric acid bath/tank to remove the scales formed on the surface of such hot rolled coils. The Revenue sought to recover the amount of Rs.1,215/- from the Appellants since according to them 50% of sale proceeds rece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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