By TIOL News Service

MUMBAI, JUNE 08, 2013: THE assessee is a manufacturer of synthetic adhesives and for the said purpose they procured different sizes of aluminium tubes and availed CENVAT credit on the same.

During December, 1999 to September, 2007, the assessee purchased aluminium tubes falling under chapter 76.12 of the Central Excise Tariff Act, 1985; availed CENVAT Credit on such purchases; used the different sizes of aluminium tubes procured for filling of their various products/adhesives; and during the such process certain aluminium tubes were damaged at different stages of the manufacturing process.

Revenue, alleging that the assessee had cleared aluminium tubes without accounting for and without payment of duty, to the extent of Rs.27,335.81 by suppressing the value of damaged aluminium tubes, treated them as waste and scrap.

Alleging contravention of a host of provisions of CER, 2002, Revenue issued show-cause notices and eventually after a due process of law, the adjudicating authority dropped the demand by relying upon an earlier identical matter that in went in favour of the appellant as the Revenue appeal filed before the Bombay High Court was also rejected.

The Revenue wanted to try its luck again and so took the matter to the Commissioner (A) who concluded that the sequence of litigative events in respect of the earlier period did not come in the way of adjudication for the current period; that the 11 show-cause notices involved for the current period and decided by the adjudication order (dated 19.01.2009) were issued on the ground that the respondent assessee was required to pay duty on the value of aluminium scrap which were cleared without accounting and payment of duty and that the earlier order of the Tribunal dated 12.05.2005 (for the earlier period) did not bar such proceedings. As a consequence of this reasoning recorded, the appellate authority set aside the adjudication order dated 19.01.2009.

Aggrieved by the appellate order and apprehending levy of duty consequently, the assessee is before the Tribunal.

The Bench observed

“4. As is apparent, while the show-cause notice demands duty on the assumption by Revenue that the assessee had cleared damaged aluminium tubes without accounting for and paying duty thereon, the adjudicating authority dropped the demand as proposed in the show-cause notices for the reasons recorded, which we have already adverted to. The appellate authority, for reasons recorded (earlier herein noticed), set aside the primary order.

5. There is however no assessment of the liability of the assessee; no determination whether the unusable aluminium tubes were manufactured or marketed, nor a determination of the assessee's liability to duty nor the quantification of excise duty is assessed, under any head, either by the primary authority or by the appellate authority.

6. As is apparent from the appellate order, the primary order is effaced and that by itself does not impose any liability on the assessee to remit tax. As a consequence the assessee suffers no prejudice nor is assessed to any duty, interest or penalty. In the circumstances, we find no reason to set aside the appellate order as no civil consequences are visited on the assessee.”

In fine, the appeal was dismissed.

(See 2013-TIOL-860-CESTAT-MUM)