Judgment:
1. The Commissioner of Central Excise Chandigarh has filed these appeals against the common order dated 26-8-1992 passed by the Commissioner of Central Excise (Appeals) Chandigarh. The brief facts are that in two appeals No. 5470 and 5472/92, the department has demanded duty on the quantity of 3281 crates of aerated water on the ground that there was an excess wastage of the input crown cork. The department says that the normal wastage permissible is 1% where as the actual wastage was found to be 1.97 per cent and on the excess wastage the department has worked out the possible final product which could have been cleared and drawn that quantity as clandestinely cleared, the duty has been demanded in this case. In the other two appeals the department has demanded the duty on the ground that the crown cork which have become waste are not eligible for Modvat credit taking the view that such corks are wasted are inputs which have been rendered useless as such and therefore will not be covered by provisions of Rule 57D of the Central Excise rules relating to Modvat which says that the Modvat credit contained in the waste arisen during the manufacture of the final product should not be denied. The jurisdictional Assistant Commissioner in all these cases initially dropped the demands and the Commissioner applied to get the orders of the Assistant Commissioner reviewed under provisions of Section 35E(2) Central Excise and Salt Act, 1944 and filed the appeals and directed the Assistant Commissioner to file appeals before the Commissioner (Appeals) for the purpose. The Commissioner (Appeals) in the common impugned order had dismissed the appeal on the ground that there was no proper authorisation enclosed with the appeal in terms of Section 35E(2) from the Commissioner and that a mere photocopy of unsigned directions which is attested will not serve the purpose.
2. We have heard Shri Jangir Singh, ld. DR and Shri V. Kohli ld.Counsel for the respondent. Although the dismissal of the appeal is on technical ground taken by the Commissioner (Appeals), yet without going into the justification for such a dismissal, we find on the basis of ld. Counsel's submission before us that even on merits the issues are covered in favour of the respondents by two Tribunal's decision in the case of Punjab Beverages v. Collector of Central Excise reported in 1996 (81) E.L.T. 673 (Tribunal) where the Tribunal in similar circumstances has held that the allegations of manufacture of aerated water of such quantity as would correspond with the quantity of crown corks which are held to have been not accounted for is not supported by any fact or established by any inquiry with regard to the procurement and utilisation of other materials required for the product and clearance of the final product without payment of duty. The Tribunal observed that it is an acceptable position that crown corks do got damaged during the course of filling up of aerated water in bottles. On this basis the Tribunal held that the demand of duty based on percentage of wastes of crown cork or their non-accountal is not sustainable. Ratio thereof would apply to the facts of the present case and the same result as in the Tribunal's order would follow. In respect of the other demand relating to the denial of Modvat on the crown corks there is another Tribunal's decision in the case of present respondents themselves reported in 1992 (59) E.L.T. 327 (Tribunal) wherein the Tribunal had held that the provisions of Rule 57D have to be applied with reference to the nature and description of the inputs and the Tribunal held that on these consideration inputs which are in the nature of discrete articles like crown corks when damaged or rendered unfit for use during the manufacture of the final product will constitute waste which no doubt, may comprise of a part of the total quantity of the particular duty paid input received by the manufacturer. Following this decision, which is applicable to the facts of these cases, the demand on this quantity of crown corks is also not sustainable. Therefore even on merits there is no need to interfere with the order of the lower authority. In this view of the matter, we see no reason to interfere with the impugned order and appeals are therefore rejected.