Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

Comments

Print   |    |  Comment

PJ/Case Laws/2011-12/1333

Exigibiliy of sale of waste sugar & waste paper cutting

Case: PARLE BISCUITS LTD.  Versus COMMISSIONER OF CENTRAL EXCISE, DELHI-III
 
Citation: 2003 (155) E.L.T. 527 (Tri. - Del.)
 
Issue:- Sale of waste sugar and waste paper cutting – whether exigible to excise duty?
 
Saleof used cylinders as waste and scrap – leviability of duty.
 
Brief Facts:- Appellants were manufacturing Biscuits, flavour mix and printed laminated waxed paper and were availing MODVAT credit of duty paid on inputs and capital goods. Department demanded duty from appellant on waste sugar and waste paper cutting.
 
 The Adjudicating Authority classified the waste sugar under Heading 1701.90 of the Schedule to the Central Excise Tariff Act and demanded duty with interest.
 
Appellant is before the Tribunal.
 
Appellant’s Contention:- Appellant contended that both these goods are not liable to duty as they are neither specified in Central Excise Tariff nor are manufactured product and have arisen during the course of manufacture of final products. Both these goods are non-excisable and not liable to duty.
 
Appellant contended that Department had incorrectly classified the waste sugar under Heading 1701.90 as it is not sugar. That if at all it will be classifiable under Heading 23.01 of the Tariff and will carry nil rate of duty. That it is not marketable as only they are selling the same to one person.
 
Appellant relied upon decision in case of Commissioner of Central Excise Hyderabad v. Nizam Sugar Factory [2000 (123) E.L.T. 210 (A.P.)] wherein it has been held that dirty sugar is not marketable and the Act does not provide for levying any duty on dirty sugar.
 
Appellant, further, submitted that they purchased paper falling under Heading 48.05 and they got waste paper which is not excisable; That the Department has wrongly classified it under sub-heading 4702.90. Appellant also mentioned that they had sent gravura printing cylinders which became useless after repeated use to the supplier company on returnable challans for replacing them against the new cylinder; that they have not followed the correct procedure.
 
Further, appellant submitted that out of the total duty of Rs. 2,28,834/- they have already deposited Rs. 1,89,803/- that some of the amount had been deposited even before the issue of show cause notice; that penalty under Section 11AC of the Central Excise Act is not imposable as part of the period is prior to the insertion of the said section in the Central Excise Act; that further, penalty under Section 11AC and Rule 9(1) of the Central Excise Rules cannot be imposed simultaneously. Finally, appellant submitted that the quantum of the penalty is on very high side.
 
Reasoning of Judgment:- The Tribunal found that appellants were availing Modvat credit of the duty paid on sugar, paper and various chemicals, etc., under Rule 57A and were manufacturing Biscuits and printed laminated wax paper. During the process of manufacture, waste sugar and waste paper are generated which was being sold by the Appellants. The sale of these waste products has not been denied by the Appellants. Once they are selling these products, it cannot be claimed by them that the said products are not marketable.
 
Once the waste products obtained during the process of manufacture are being sold, the appropriate duty of excise would be payable by the Appellants under Rule 57F of the Central Excise Rules, 1944. Heading 1701 of the Tariff applies to Cane or beat sugar or chemical sucrose in solid form. The waste sugar is appropriately classifiable under Heading 1701.90 and is not classifiable under Heading 2301 as sugar is covered by Chapter 17 only and Chapter 23 of the Tariff applies to residues and waste from the food industries including baggage, other waste or sugar manufacture and oil cakes; that the waste sugar is not, therefore, covered by Chapter 23 of the Tariff.
 
There is no force in the contention of Appellants that waste paper is not classifiable under sub-heading 4702.90. Upon showing of Heading 47.02 which covers recovered (waste and scrap) paper or paper board was shown to the appellant, they fairly, conceded that waste paper will be classifiable under sub-heading 4702.90. Accordingly, duty of excise is payable by them in respect of both these products.
 
It was held that the ratio of decision of the Andhra Pradesh High Court in case of Nizam Sugar is not applicable as the facts are completely different. In the said judgment, the respondents were claiming rebate in respect of duty on sugar under a notification. In that context, the High Court held that expression ‘sugar produced by a manufacturer’ in the notification would not take any other kind of sugar to entitle the manufacturer to claim the benefit of rebate and it is only by re-processing that the dirty sugar has ultimately become marketable sugar and therefore, the expression sugar produced does not take in within its fold every kind of sugar in the process of transformation.
 
With regard to Gravura printing cylinders, it was noted that the Commissioner (Appeals) has given his finding that appellants had availed of MODVAT credit under Rule 57Q on these cylinders, and had sent them to the supplier who was adjusting the price of used cylinders towards the cost of the new cylinder supplied by him. The Commissioner (Appeals) has, therefore, held that the provisions of Rule 57S(2)(c) are attracted and duty is payable by the Appellants. The Tribunal found no reason to interfere with the finding of the Commissioner (Appeals) as the said sub-rule clearly provides that where capital goods are sold as waste and scrap, the manufacturer shall pay duty leviable on such waste and scrap.
 
Decision:- Appeal partly allowed. 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com