ORDER
C.N.B. Nair, Member (T)
1. The revenue’s application is for early hearing and change of cause title. The application is allowed and we take up the appeal for disposal.
2. We have perused the records and heard both sides. The duty demand of over Rs. 20.00 lakhs remains confirmed against the appellants. The demand is in respect of waste and scrap cleared by them for a period of five years. It has been held that the waste and scrap are liable to duty and the appellant has cleared them without payment of duty. Reliance has been placed by the revenue on Note 8(a) of Section 15 of the CETA.
3. The contention of the counsel for the appellant is that the appellant is a manufacturer of paper and paper board. It does not carry out manufacture of any engineering products out of metal. It has only a workshop which attends to incidental repair of machinery installed. Ld. Counsel has submitted that the scrap in question arose from discarded machinery and from other items of waste. They were not arising in the manufacture of any excisable goods. Counsel has also emphasised that no credit had been taken by the appellant in respect of the machinery or other items which were subsequently sold as waste and scrap. Counsel has also taken us through many decisions of this Tribunal which are as follows:
(i) ACC Ltd. v. CCE – 2001 (46) RLT 745
(ii) Tecumseh Products India Ltd. v. CCE – 2004 (169) ELT 55
(iii) Kumbhi Kasari SSK Ltd. v. CCE – 2004 (173) ELT 61
(iv) K.M. Sugar Mills Ltd. v. CCE – 2004 (164) ELT 40 and also the decision of the Supreme Court in the case of Elphinstone Metal Rolling Mills v. CCE – 2004 (167) ELT 481 (SC).
4. The scope of the levy remains settled by the decision of the Apex Court in the aforesaid case. Para 8 of the judgement may be noted in particular, which is as follows:
“8. We think the view taken by the Tribunal cannot be considered to be as inappropriate. Unless the scrap and waste are goods that had been used can be demonstrated to have been a duty paid goods, it cannot be assumed that they are so, particularly when it cannot be said with certainty that all scrap and waste material used has been subject to excise duty earlier. The waste and scrap was dutiable only when it is a manufactured product and not otherwise. The object of exemption being to avoid cascading effect in the matter of payment of excise duty”.
5. It is well settled that the burden of establishing the dutiability is on the revenue. The present demand has been made only on a finding that since the appellant had the workshop for maintenance, the entire waste and scrap disposed of during the last five years would have arisen from the operations in that workshop. Other than this presumption there is nothing on record to support the demand of duty. In fact the entire records of the appellant and the appellant’s contention points to the contrary, that the waste and scrap had arisen through discarding obsolete machinery and other items. The appellant has also not taken Modvat credit on the items. In these circumstances it has to be held that the duty demand is entirely unsupported by evidence. The demand is also contrary to the aforesaid decisions of the Tribunal and the apex Court.
6. In view of what is stated above, the appeal is allowed, with consequential relief, if any to the appellants.