CENTURY RAYON Vs. UNION BANK OF INDIA

JUDGEMENT

(1.) THIS petition is directed against the circular issued by the Central Board of Excise and Customs (Board for short) dated 7-4-1998 and consequent show cause notice dated 10-8-1998 alleging therein that the petitioner No. 1 M/s. Century Rayon has wilfully suppressed the fact of manufacture of Cinder with an intention to evade payment of excise duty (duty for short) and evaded duty to the tune of Rs. 12,29,350/- and why the same be not recovered from them with penalty under Rule 209-A of the Central Excise Rules, 1994 (Rules for short) framed under the Central Excise and Salt Act, 1944 (Act for short ). FACTS IN BRIEF: the 1st petitioners herein are the Division of Century Textile Industries Ltd. , a company registered under the Indian Companies Act, 1956, engaged, inter alia, in the manufacture of excisable goods, having its factory, inter alia; at Shahad, Taluka-Kalyan, Dist. Thane. The 2nd petitioner is the Vice President (Finance) of the first petitioner/company.

(2.) THE petitioners have coal fired boiler for generating steam in their factory at Shahad. The steam generated in the said boiler is used in the manufacture of excisable goods. The petitioners purchase coal; classifiable under Chapter 27; and use in the generation of the said steam. During the generation of the said steam, coal ash (cinder) emerges by way of waste product.

(3.) THE petitioners cleared such cinder as waste without payment of duty, in view of the decision of the Board holding that the cinder is not excisable and that cinder obtained while burning coal in the boiler does not amount to manufacture within the meaning of the Act, even if it is sold for a consideration.