Pr. Commissioner of Central Tax Vs Maruti Ispat And Energy Pvt Ltd. (CESTAT Hyderabad)
Marketability Alone Cannot Make Incidental Waste Excisable; Dolochar and Fly Ash Without Manufacture Not Excisable; Sponge Iron Waste Not Excisable Merely Because Marketable; Manufacture Essential for Excise Duty on Waste Materials; Excise Demand on Dolochar, Fly Ash and Iron Fines Quashed: CESTAT Hyderabad
Summary: The CESTAT Hyderabad dismissed the Department’s appeal against the order of the Commissioner (Appeals) setting aside Central Excise duty of Rs. 1,91,54,979/-, interest and penalties demanded from the respondent, a manufacturer of sponge iron falling under tariff item 72031000. During manufacture, dolochar, fly ash, waste material and iron ore fines emerged and were cleared without payment of duty. The Department treated these materials as marketable excisable goods and issued a Show Cause Notice dated 04.02.2016 for the period April 2010 to January 2015. The Adjudicating Authority confirmed the demand with interest and penalty under Section 11AC of the Central Excise Act, 1944 and imposed personal penalties upon the Managing Director and authorised signatory under Rule 26 of the Central Excise Rules, 2002. The Commissioner (Appeals), however, held that the disputed materials did not arise from any process of manufacture and set aside the entire demand, leading to the Department’s appeal before the Tribunal.
