NIZAM SUGARS LTD. Vs. CCE

JUDGEMENT

(1.) Whether scrap generated by dismantling of old and obsolete machinery used for the manufacture of sugar in their plants at Seethanagaram and Bobbili is excisable to duty or not is a question to be considered in this case. We find that the issue involved herein is no longer res -integra in view of the decision of the Supreme Court in the case of Union of India v. Ahmedabad Electricity Co. Ltd. . In that case, it was clearly held that "unburnt or partly burnt pieces of coal in boiler and furnaces having no capacity to produce flame for further use, is coal of inferior quality, something between coal and coal ash and not ash, classifiable under Heading 26.21 of Central Excise Tariff Act, 1985.' It was also held that "it was not a marketable commodity, even though sold for small price."

(2.) It was submitted by the Counsel that the ratio of the decision of the Supreme Court referred to above has been followed by this Tribunal in a series of cases including the decision of Hindustan Petroleum Corpn. Ltd. v. CCE, Visakhapatnam reported in 2002 (52) RLT 688 (CEGAT, Bangalore). In that case it was held that worn out and damaged parts of machinery and plant cut into pieces for the purpose of dismantling were not excisable metal scrap.

(3.) Following the ratio of the aforesaid decisions, we accept the plea of the party and accordingly, appeal is allowed with consequential relief, if any. (Pronounced and dictated in open court).