COMMISSIONER OF CENTRAL EXCISE Vs. ASHOK LEYLAND LTD.

JUDGEMENT

(1.) THIS is a Revenue appeal against the Order -in -Appeal No. 63/2000, dt. 2 -5 -2000 by which the Commissioner (Appeals) has set aside the order -in -original demanding duty of Rs. 12,614/ - and imposing penalty of Rs. 500/ - on the ground that waste oil cleared during the period February 99 to June 1999 is subject to levy of Central Excise duty. The Commissioner (Appeals), in the impugned order in Paras 5 and 6, has held as follows :

(2.) REVENUE contends in this Appeal that the assessee had availed Modvat credit on lubricating oils, cutting oils, coolants etc. under Rule 57Q of the Central Excise Rules, 1944 which were used for cleaning and lubricating etc. After the said use, the said capital goods were cleared as waste oil. As per Rule 57S(2)(c) capital goods arc sold as waste and scrap, the manufacturer are required to pay the duty leviable on such waste and scrap. It is contended that appropriate duty under sub -heading 2710.90 is required to be paid as "waste oil". Therefore, the order of the Commissioner (Appeals) is not proper and requires to be set aside.

(3.) I have heard both sides and perused the records. Rule 57Q and Rule 57S(2)(c) require payment of duty where the duty has been levied in terms of Central Excise Tariff Act. For "waste oil" under the tariff Heading 27, there is no chapter note or chapter heading defining waste oil and the same to be levied immediately. The chapter Heading 2710 pertains to "Mineral fuels, Mineral oil and product of their distillation Bituminous substances, mineral waxes". I have perused the chapter notes and find that there is no chapter note to define "Waste Oil". Similar definition pertains to stainless steel waste and scrap, ferrous and non -ferrous is available under Section XV in Note (8). There is a specific tariff heading for waste and scrap under Heading 7204.20 for waste and scrap arising out of the manufacture of cold rolled Stainless steel patti/patta. Likewise there are specific headings for Aluminium, Copper waste, yarn waste also find entry under Chapter heading 5202.10. There has to be levy in terms of Section 3 of the Central Excise Act, 1944 and it has to be incorporated in the specific Tariff Heading a rate to be levied as duty. The authorities have taken chapter Heading 2710.90 of the Tariff for proposing the levy on "Waste Oil" which is a residue entry, "others" under the single ( -) under heading "Petroleum oil and oils obtained from Bituminous minerals, other than crude." There is no mention for waste oil and hence the residuary entry "others" cannot be read to be for "Waste oil". In terms of large number of judgments rendered in the case of Markfed Vanaspati and Allied Industries v. CCE reported in 2000 (116) E.L.T. 204 (T) = 2000 (36) RLT 170 the Commissioner has held that waste oil is not leviable for duty. I agree with the findings recorded by the Commissioner (Appeals) and for the reasons recorded by him, I do not find any merit in this Revenue appeal, hence the same is rejected.