PARLE BISCUITS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) M/s. Parle Biscuits Ltd. have filed this appeal being aggrieved by the Order -in -Appeal No. 236/2002, dated 16 -7 -02 passed by the Commissioner of Customs (Appeals).

(2.) Shri Harbans Singh, learned Advocate, submitted that the Appellants manufactured Biscuits, flavour mix and printed laminated waxed paper and availed of the MODVAT credit of the duty paid on inputs and capital goods; that the duty has been demanded from them on waste sugar and waste paper cutting; that both these goods are not liable to duty as they are neither specified in Central Excise Tariff nor are manufactured product and have arisen during the course of manufacture of final products; that therefore, both these goods are non -excisable and not liable to duty; that the department has classified the waste sugar under Heading 1701.90 of the Schedule to the Central Excise Tariff Act, which is not correct as it is not sugar; that if at all it will be classifiable under Heading 23.01 of the Tariff and it carries nil rate of duty; that it is not marketable as only they are selling the same to one person. He relied upon the decision in the case of Commissioner of Central Excise Hyderabad v. Nizam Sugar Factory, 2000 (123) E.L.T. 210 (A.P.) wherein it has been held that dirty sugar is not marketable and the Act does not provide for levying any duty on dirty sugar. The learned Advocate, further, submitted that the Appellants purchased paper falling under Heading 48.05 and they got waste paper which is not excisable; that the Department has wrongly classified it under sub -heading 4702.90. He also mentioned that they had sent gravura printing cylinders which became useless after repeated use to the supplier company on returnable challans for replacing them against the new cylinder; that they have not followed the correct procedure. Finally, he submitted that out of the total duty of Rs. 2,28,834/ - they have already deposited Rs. 1,89,803/ - that some of the amount had been deposited even before the issue of show cause notice; that penalty under Section 11AC of the Central Excise Act is not imposable as part of the period is prior to the insertion of the said section in the Central Excise Act; that further, penalty under Section 11AC and Rule 9(1) of the Central Excise Rules cannot be imposed simultaneously. Finally, he submitted that the quantum of the penalty is on very high side.

(3.) Countering the arguments Shri U. Raja Ram, learned Departmental Representative reiterated the findings as contained in the Adjudication Order as well as impugned Order -in -Appeal.