B. Ravichandran ORDER
B. Ravichandran, Member (T)
1. The appeal is against the order dated 29.09.2009 of Commissioner (A) Indore. The appellant is engaged in the manufacture of dry battery cell liable to central excise duty. They were availing Cenvat Credit of duty paid on inputs and capital goods as well as services.
2. Paper and paper board is one of the raw materials purchased by the appellant on payment of duty. They have availed credit on the same. The said paper and paper boards are used for producing intermediate products after application of wax. It is used for painting, chemical coating and slitting for packing of dutiable and finished goods also. During this process some waste and scrap is generated. These were cleared for a consideration by the appellant. The revenue proceeded to demand duty on said scrap of paper under the heading 4707 as waste and scrap of paper or paper board. The Original Authority as well as the first Appellate Authority confirmed the demand against the appellant. An equal amount of penalty also was imposed on the appellant.
3. We have heard both the sides and perused the appeal records.
4. We find that the appellant is not engaged in the manufacture of any paper or paper board. These items were their inputs procured after payment of Cenvat Credit duty. These inputs were put to intended use in appellant's factory. In such a situation this is not tenable to hold that appellant was engaged in the manufacture of waste and scrap of paper. We note the similar dispute was before the Tribunal in the case of WIMCO Ltd. vs. CCE Lucknow [MANU/CE/0527/2008 : 2008 (230) ELT 106 (Tri-Del)]. The Tribunal held as below:
In the present case, we find that the appellant has purchased duty paid paper and paperboard from the market. They are not the manufacturer of paper and paperboard and they are merely consumers of paper and paperboard. When they used such paper and paperboard for manufacture of empty boxes, some quantity of waste, scrap and parings of paper and paperboard has arisen. They had no intention to manufacture of scrap waste or paring. The intention is to minimize/avoid the wastage and not to produce the same. These scrap/waste/paring also cannot be considered as intermediate product or byproduct during the course of manufacture of any excisable goods. No new product has come into existence. The scrap of paper cannot be considered as a product different from the paper, the waste arising out of paperboard is not a product different from paperboard. We also do not find any special definition rendering emergence of such waste, scrap, paring as amounting to manufacture. Mere mentioning in the tariff is not sufficient to attract excise levy.
5. Following the above ratio, we find no justification in the impugned order and accordingly set aside the same. Appeal is allowed.
[Order Pronounced in the open court on 18.10.2016]
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