Mahindra and Mahindra Ltd. Vs. Commissioner of Customs and - Court Judgment

Excerpt:
1. this appeal is directed against the order of the commissioner (appeals) nasik who held that the goods cleared as waste and scrap by the appellant is capable of being used for manufacture of smaller components and therefore can not be classified under 7204.90 of central excise tariff act, as scrap but is appropriately classifiable under 7210.10 as 'shapes'. the ld. commissioner (a) held that duty applicable to inputs (7210.10) is payable under rule 57f(i) (ii) of central excise rules.2. the period in dispute april 1997 to march 1998. the amount of duty demanded is rs. 35,22,629.43/-.3. the appellant receives duty paid crca sheets for manufacture of motor vehicles. the steel sheets are subjected to operations like drawing, forming, blanking etc. on hydraulic presses. during such operations certain scrap arises and such scrap is collected and sold by public auction by the appellants on payment of duty applicable to waste and scrap under chapter heading 7204.90. the commissioner (a) held that what was being cleared by the appellants is not scrap but inputs as such albeit in smaller sizes (shapes) than what were originally received by them.5. we have perused the definition of scrap contained in section note 8(a) of section xv of the central excise tariff this note is introduced w.e.f. 1.3.88. it reads thus "metal waste and scrap from the manufacture or mechanical working of metals and metal goods definitely not usable as such because of breakage cutting up wear or other reasons". we observe that the department has been taking different stands at different points of time in respect of the same assessee in regard to the same goods. on occasions they consider the goods in question as waste and scrap and on other occasions as 'shapes' etc. in the order-in-original no. 97/94 dated 28.8.94 the collector of central excise aurangabad held that the goods cleared by the appellant should fall under sub heading 7204.90 of ceta as, waste and scrap. no appeal is filed against this order. in the impugned order the commissioner (a) nasik helds a different view in respect of the same goods. we agree with the appellants' contention that such inconsistent stands leave the assessee in a perpetual state of confusion. whether the goods cleared as scrap is really scrap or not depends on the fact of each case. the appellants have made out a strong prima facie case in their favour. we therefore waive the pre-deposit of duty demanded and stay recovery thereof pending the appeal.

Judgment:
1. This appeal is directed against the order of the Commissioner (Appeals) Nasik who held that the goods cleared as waste and scrap by the appellant is capable of being used for manufacture of smaller components and therefore can not be classified under 7204.90 of Central Excise Tariff Act, as scrap but is appropriately classifiable under 7210.10 as 'shapes'. The Ld. Commissioner (A) held that duty applicable to inputs (7210.10) is payable under Rule 57F(i) (ii) of Central Excise Rules.

2. The period in dispute April 1997 to March 1998. The amount of duty demanded is Rs. 35,22,629.43/-.

3. The appellant receives duty paid CRCA sheets for manufacture of motor vehicles. The steel sheets are subjected to operations like drawing, forming, blanking etc. on hydraulic presses. During such operations certain scrap arises and such scrap is collected and sold by public auction by the appellants on payment of duty applicable to waste and scrap under Chapter heading 7204.90. The Commissioner (A) held that what was being cleared by the appellants is not scrap but inputs as such albeit in smaller sizes (shapes) than what were originally received by them.

5. We have perused the definition of scrap contained in Section Note 8(a) of Section XV of the Central Excise Tariff This note is introduced w.e.f. 1.3.88. It reads thus "Metal Waste and Scrap from the manufacture or mechanical working of metals and metal goods definitely not usable as such because of breakage cutting up wear or other reasons". We observe that the department has been taking different stands at different points of time in respect of the same assessee in regard to the same goods. On occasions they consider the goods in question as waste and scrap and on other occasions as 'Shapes' etc. in the order-in-original No. 97/94 dated 28.8.94 the Collector of Central Excise Aurangabad held that the goods cleared by the appellant should fall under sub heading 7204.90 of CETA as, waste and scrap. No appeal is filed against this order. In the impugned order the Commissioner (A) Nasik helds a different view in respect of the same goods. We agree with the appellants' contention that such inconsistent stands leave the assessee in a perpetual state of confusion. Whether the goods cleared as scrap is really scrap or not depends on the fact of each case. The appellants have made out a strong prima facie case in their favour. We therefore waive the pre-deposit of duty demanded and stay recovery thereof pending the appeal.