CCE, CHANDIGARH-II Vs. NESTLE INDIA LTD.

JUDGEMENT

(1.) THE Revenue in the present appeal has questioned the validity of the impugned order -in -appeal dated 21.5.2002 vide which the Commissioner (appeals) had reversed the Order -in -original of the Deputy Commissioner confirming the duty demand of Rs. 7,336/ - with equal amount of penalty under Section 11AC and penalty of Rs. 1,000/ - under rule 173Q payable along with interest under Section 11AB of the Act. The issue in this appeal relates to the duty payable on the glass scrap arising in the course of manufacture of sauces and filling of the tomato ketchup in the bottles. The plea taken up by the respondents was that the glass scrap was in the shape of broken pieces of bottles/jars and was not excisable and dutiable as it did not arise in the manufacture of excisable and dutiable goods. They removed the scrap without payment of duty from the factory during the period 1.7.1999 to 31.12.1999 of the value of Rs. 45,847/ - involving central excise duty of Rs. 7336/ -. They were, accordingly, served with show cause notice dated 1.2.2000 requiring them to pay duty and penalty was also proposed to be imposed on them in that notice. After getting their reply, the Adjudicating authority confirmed the demand through the Order -in -original. That order had been set aside by the Commissioner (appeals) while taking the contrary view that glass scrap was not excisable and dutiable. The Revenue has come up in appeal.

(2.) KEEPING in view the facts and circumstances of the case, I do not find any sufficient ground for setting aside the penalty. However, in view the facts and circumstances of the case, the penalty under Section 11AC of the Act is reduced to Rs. 5,000/ - and penalty under rule 173Q is also vacated. Except for this modification in the penalties, the Order -in -original of the Deputy Commissioner is restored. In view of the discussions made above, the impugned order of the Commissioner (appeals) is set aside and that of the adjudicating authority is restored with modification in the penalties, as detailed above. The appeal is allowed accordingly.