COMMISSIONER OF C. EX., COCHIN Vs. ANIKON RUBBERS

JUDGEMENT

(1.) M /s. Anikon Rubbers, Eravuchira P.O. Thottakkadu, Changanacherry are manufacturers of tread rubber, cushion gum etc., falling under Chapter 40 of Central Excise Tariff Act, 1985. It was noticed by the Superintendent of Central Excise, Changanacherry Range that they had cleared 11051 Kgs of rubber compound waste during the period 12/94 to 3/95 and 5043 Kgs during 4/95 on payment of central excise duty @ 10% ad valorem. As the quantity cleared as waste seemed quite abnormal when compared to the production of tread rubber the Superintendent of Central Excise issued show cause notice No. 39/95, dated 21 -6 -1995 demanding differential duty Rs. 66,306/ - for the period 12/94 to 3/95 and show cause notice No. 41/95, dated 6 -7 -1995 demanding differential duty Rs. 30,258/ - for the period 4/95 on the belief that the tread rubber was being cleared in the guise of waste rubber compound. The Assistant Commissioner of Central Excise, Kottayam Division confirmed the demands vide common Order -in -Original Nos. 41 & 42/96, dated 6 -7 -1995 demanding differential duty Rs. 30,258/ - for the period 4/95 on the belief that the tread rubber was being cleared in the guise of waste rubber compound. The Assistant Commissioner of Central Excise, Kottayam Division confirmed the demands vide common Order -in -Original Nos. 41 & 42/96, dated 8 -3 -1996 and imposed penalties Rs. 1,000/ - and Rs. 500/ - in respect of show cause notice Nos. 39/95 and 41/95. On appeal filed by the party before Commissioner (Appeals), Cochin against Order -in -Original Nos. 41 & 42/96, vide Order -in -Appeal No. 238/96 (c), dated 23 -7 -1996, the Commissioner (Appeals), Cochin remanded the case to the original authority since the percentage of waste material vis -a -vis the finished goods cleared during the period are not expressed in absolute terms or percentage points. The Assistant Commissioner of Central Excise, Kottayam Division decided the case afresh in the light of the observations made by the Commissioner (Appeals) vide a common Order -in -Original Nos. 50/97 to 51/97, dated 26 -5 -1997. The Assistant Commissioner of Central Excise confirmed a total sum of Rs. 75,427/ - towards differential duty payable on clearances of tread rubber, described in the invoice as scrap/waste in the form of strips of rubber compound during the period 12/94 to 4/95 and also imposed a penalty of Rs. 500/ -. M/s. Anikon Rubbers filed an appeal before Commissioner (Appeals), Cochin against Order -in -Original Nos. 50/97 to 51/97 of Assistant Commissioner, Kottayam along with stay application. The stay application filed with the appeal was disposed of vide order No. 3/98, dated 31 -3 -1998, as per direction in O.P. No. 2658/98 of the Honble High Court of Kerala, by directing M/s. Anikon Rubbers to make a pre -deposit of Rs. 38,000/ - and they have complied with the same. The appeal filed by the Anikon Rubbers has been decided by the Commissioner (Appeals), Cochin vide Order -in -Appeal No. 47/2000 -C.E., dated 5 -7 -1997. The Commissioner (Appeals) annulled the Order -in -Original Nos. 50/97 and 51/97, dated 26 -5 -1997 passed by the Asstt. Commissioner of Central Excise, Kottayam Division and ordered to refund the pre -deposit of Rs. 38,000/ - to M/s. Anikon Rubbers.

(2.) GROUNDS in the Appeal are :

(3.) WE have heard both sides and considered the submissions and find -