Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Central Excise Act polyester chips |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Central Excise Act, 1944/Central Excise Tariff Act, 1985-Section 11A/Chapter Heading 39.15 and 39.07-Excise duty-Levy of-On polyester chips spilled over during process of bagging-Classification of the product by assessee under heading 39.15 as sweeping waste incurring 'nil' duty-Demand of duty by Revenue classifying it under heading 39.07 invoking extended period of limitation-Revenue and the Tribunal held the product classifiable under heading 39.07-On appeal, held : The spilled chips are classifiable under Chapter Heading 39.07-It cannot be said to be waste during manufacturing process. The chips by spillage did not cease to be chips by dust contamination-Revenue could invoke extended period of limitation as the assessee in the classification list had not specified the stages of production and the manner the wastes had emerged-Central Excise Rules, 1944-Rules. 9, 49, 52A and 276. Appellant-assessee was manufacturer of partially oriented yarn of polyester and polyester chips. During one of the stages of manufacture i.e. bagging, some 'chips' fell off and were collected. For the purpose of assessment, the assessee had termed the spilled chips as "sweeping wastes" classifiable as 'waste' under heading 39.15 of Central Excise Tariff Act, 1985, incurring 'nil' duty. Revenue demanded duty on the spilled chips. Revenue by invoking extended period of limitation also demanded duty, for clearance of polyester chips as 'waste' without cover of gate passes and in contravention of Rules 9, 49, 52A and 276 of Central Excise Rules, 1944 with intention to evade payment of duty. The Adjudicating Authority confirmed the demand holding that the spilled chips were not 'waste' classifiable under heading 39.15 as any contamination of the 'chips' after their manufacture will not change the nature of the product. It also rejected the claim of the assessee for benefit of 'nil' rate of duty under a notification dated 1.3.1992 on account of absence of evidence showing utilization of 'Chips' in the manufacture of Polyester Staple Fibre. In appeal, Customs, Excise and Gold (Control) Appellate Tribunal upheld the order passed by Adjudicating Authority. However, it remitted the matter to the Commissioner to decide as to whether the assessee had fulfilled all the conditions stipulated in the Notification. In appeal to this Court the questions for consideration were whether the product termed by the assessee as "sweeping wastes" was classifiable under Chapter Heading 39.15 (waste) or under Chapter Heading 39.07 (Primary Form of plastic) of the Act; and whether the Department was right in invoking Section 11A(1)? |
Judge | Honble Mr. Justice S.H. Kapadia |
Neutral Citation | 2005 INSC 94 |
Petitioner | D.c.l. Polyster Ltd., Nagpur |
Respondent | Collector Of Central Excise And Customs |
SCR | [2005] 2 S.C.R. 279 |
Judgement Date | 2005-02-22 |
Case Number | 6559 |
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