Clearance of Waste & Scrap generated during wear and tear

PJ/Case Laws/2011-12/1533

Clearance of Waste & Scrap generated during wear and tear - dutiability of

Case: PANASONIC CARBON INDIA CO. LTD. Versus COMMISSIONER OF C. EX., GUNTUR

Citation: 2007 (213) E.L.T. 391 (Tri – Bang.)

Issue:- Dutiability of Waste and scrap generated as a result of wear and tear.

Brief Facts:- This appeal arises from the Order-in-Appeal No. 6/2005(G)(D)C.E., dated 7-12-2005 by which the Commissioner (Appeals) set aside the Order-in-Original No. 06/2004, dated 13-9-2004, passed by the Assistant Commissioner holding that the proposed demand of the Central Excise duty on Waste and scrap cleared during the period from 1994-95 to 2001-2002 and from 1-4-2002 to 31-12-2002 is not dutiable and dropped the proceedings. The Commissioner (Appeals) has taken a view that the Waste and scrap was generated out of the used empty barrels, used barrel sheets (pitch sheets), burnt fire bricks, broken grinding wheel’s, coal black powder, used HDPE bags and iron scrap of factory workshop..

Appellant’s Contention:- the Appellant submits that all these items are Waste and scrap and are basically not excisable. He submits that each of the item cleared is not dutiable as held by various judgments:

(a)        Drums, Containers, Barrels & HDPE bags in which inputs are received

(i)        CBEC Circular Nos. 721/37/2003-CX, dated 6-6-2003 & 449/15/99-CX, dated 23-3-1999.
(ii)       West Coast Industrial Gases Ltd. v. CCE [1999 (108) E.L.T. 383] affirmed by the Apex Court in CCE v. West Coast Industrial Gases Ltd. [2003 (155) E.L.T. 11 (S.C.)]
(iii)      IOL Ltd. v. Collector [1993 (68) E.L.T. 624]
(iv)     Castrol India Ltd. v. CCE [1998 (99) E.L.T. 234]

(b)        Fire Bricks and griding wheel’s (capital goods) due to wear & tear

(i)        Larsen & Toubro Ltd. v. CCE [2004 (173) E.L.T. 515]
(ii)       CCE v. Birla Corporation [2005 (181) E.L.T. 263]
(iii)      Birla Corporation v. CCE [2003 (162) E.L.T. 499]

(c)        Coal/Black Powder (Floor Sweepings)

(i)         Union of India v. Ahmedabad Electricity Company Ltd. [2003 (158) E.L.T. 3 (S.C.)]

(d)        Waste and scrap obtained in factory workshop during repair and maintenance

(i)         Kumbhi Kasari SSK Ltd. v. CCE [2004 (173) E.L.T. 61]
(ii)       A.C.C. Ltd. v. CCE [2001 (133) E.L.T. 375 (Tri.) = 2001 (46) RLT 745]
(iii)      HPCL v. CCE [2002 (144) E.L.T. 555 (Tri.) = 2002 (52) RLT 688]

Reasoning of Judgment:- On a careful consideration of the matter and on perusal of the judgments cited supra, the Tribunal noticed that all the items which were cleared are not dutiable. They were cleared from the workshop of the factory as Waste and scrap on account of its wear and tear. All the judgments cited supra are clearly applicable to the facts of the case. Respectfully following ratio of the cited judgments, the demand raised on waste and scrap is set aside by allowing the appeal with consequential relief.

Decision:- Appeals allowed.

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PJ/Case Laws/2011-12/1533

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