CCE, LUCKNOW versus M/S. WIMCO LTD.

Citation: [2007] 10 S.C.R. 560 · Decided: 05-10-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
CCE, LUCKNOW 
v. 
MIS. WIMCO LTD. 
OCTOBER 5, 2007 
B 
[DR ARIJIT PASAYAT AND LOKESHW AR SING HP ANTA,JJ.] 
Central Excise Tariff Act, 1985; Sub-heading 4702.90/Central 
Excise Act, 1944; S.l lAB!Central Excise Rules; rr.52-A and 173-Band 
C Exemption Notification No.89195 dated 18.5.1995: 
Classification-Waste/scrap/parings from manufacture of printed 
paper boxes sold by assessee-No declaration made-Neither 
classification list filed nor invoices issued in terms of Rule 5 2A of the 
D Rules-Levy of Excise duty-Show Cause Notice-Revenue confirmed 
demand of certain amount of the duty and also imposed penalty-
., Appeal against the order of Revenue allowed by the Tribunal holding 
that charging of excise duty on such waste/scrap/parings tan/amounts 
to charging of duty on the same product twice-On appeal, Held: 
E Tribunal came to an abrupt conclusion without considering the factual 
scenario-Hence, matter remitted to it for consideration afresh in the 
light of the decision on the subject, as referred in the judgment-
Directions issued 
F 
Respondent-assessee is manufacturer of printed paper board 
boxes from paper board. The waste/scrap/parings generated in the 
process was allegedly sold by the assessee without making declaration 
of such transactions, nor did it file classification list under Rule 173-B 
of the Central Excise Rules, 1944. Since goods in question were 
G classifiable under sub-heading 4702.90 of the Central Excise Tariff Act, 
a show cause notice was issued by the competent authority. Later, 
Commissioner of Central Excise confirmed the demand of excise duty 
amounting to Rs. 23,20,000/- imposing penalty ofidentical amount and 
also directed payment ofinterest at the appropriate rate under Section 
H 
560 
1 
CCE, LUCKNOW v. M/S. WIMCO LTD. 
561 
llAB of the Central Excise Act, 1944. Aggrieved, the assessee filed A 
appeal before the CEGAT. The Tribunal held that the paper and paper 
board are used as inputs and continue to be paper and paper board when 
they appear as waste/scrap/parings. Charging of duty on such waste/ 
scrap/paring tantamounts to charging of duty on the same product twice. 
Hence the present appeal. 
B 
Revenue contended that effect of non-filing of classification list 
under Rule 173B of the Rules has not been considered by the Tribunal; 
that the fact that there is a sale of waste/scrap/parings, was also not 
considered by the Tribunal; and that the benefit of exemption under C 
Notification No. 89/95dated18.5.1995 is not available to the assessee. 
Allowing the appeal, the Court 
HELD: 1.1. Merely because there is a tariff entry, the goods does 
not become excisable unless the process of manufacture is involved. D 
[Para 12] [566-B] 
Commissioner of Central &cise, Chandigarh-Iv. Marlged Vanaspati 
& Allied Industries, (2003) 153 EL T 491 SC, relied on. 
1.2. Since CEGA T has not dealt with the factual scenario in detail E 
and has come to an abrupt conclusion that no manufacture is involved, 
the matter is remitted to it for fresh consideration in the light of the 
relevant decisions. [Para 14) [568-E] 
Kores India Ltd, Chennai v. Commissioner of Central Excise, F 
Chennai, [2005) 1 SCC 385, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4567 of 
2002. 
From the Final Order No. 247/2001-D dated 28.11.2001 passed G 
by the Customs Excise and Gold Control Appellate Tribunal, New Delhi 
in Appeals No. E/281/2001-D. 
Nagendra Rai, T.V. Ratnam, Jayesh Gaurav, K. Subba Rao and B. 
Krishna Prasad for the Appellant. 
H 
562 
SUPREME COURT REPORTS 
[2007] 10 S.C.R. 
A 
V. Lakshmi Kumaran, Alok Yadav and Rajesh Kumar for the 
Respondent. 
The Judgment of the Court was delivered by 
DR. ARIJIT PASA Y AT. J. 1. Challenge in this appeal is to the 
B 
order passed by the Customs Excise and Gold (Control) Appellate 
Tribunal, New Delhi (in Short the 'CEGAT'). By the impugned judgment 
dated 28.11.2001 CEGAT allowed the appeal filed by the respondent 
holding that waste/scrap/parings of paper board which are generated 
during the process of manufacture of paper and paper board in nothing 
C 
new, distinct in name, character and use for the purpose oflevy of duty. 
Therefore, it was held that no duty was chargeable. 
2. Background facts in a nutshell are as follows: 
During investigation of the accounts of Mis Wimco Ltd. Bareilly, it 
D transpired that the respondent was using paper and paper board for the 
manufacture of printed paper board boxes. During the course of 
man

Excerpt shown. Read the full judgment & AI analysis in Lexace.