JAYPEE BELA PLANT Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants are manufacturers of cement falling under Chapter 25 of the Schedule to the Central Excise Tariff Act, 1985. Cement is produced by grinding of clinker with gypsum, flyash or slag. This clinker is produced in Rotary kilns by burning finely ground Limestone Raw Mix at high temperatures up to 1450C. The severe temperature conditions in the kiln necessitate protection of the kiln shell against heat, which is achieved by lining the inner sides of the kiln with refractory fire bricks. This refractory lining has the further advantage of preventing excessive heat loss to the surroundings by virtue of its insulating characteristics. The fire bricks would lose their resistance over a period of 3 to 4 months of constant use whereafter they would require to be removed for fresh lining of the kiln -shell with new fire bricks. During the period March, 1995 to September, 1997, the appellants removed the used fire bricks as waste and scrap from their Rewa Plant without payment of duty. The department issued 4 show cause notices proposing to recover the duty by treating the item as used fire bricks under Rule 57 -S(2)(b) of the Central Excise Rules, 1944. The appellants contested the show cause notices. The Commissioner of Central Excise, who adjudicated the dispute, held that no duty was recoverable on the material under Rule 57 -S(2)(b). The Commissioner, however, demanded duty on the material under Rule 57 -S(2)(c), holding that waste and scrap of fire bricks were classifiable under sub -heading 6901.90 of the CET Schedule. The duty so demanded is Rs. 68,333/ -. The Commissioner also imposed a penalty of equal amount on the appellants under Section 11AC of the Central Excise Act. Appeal Nos. E/1624 and 1630 -32/2002 are against this decision of the Commissioner.

(2.) In July, 1998, the appellants had sold used fire bricks as waste and scrap from their Bela Plant on payment of duty @ 15% under protest. The department issued a show cause notice to them proposing to recover duty on the material as used fire bricks under Rule 57 -S(2)(b). This show cause notice was also adjudicated in the same way as above and the amount of duty already paid by the appellants was adjusted by the Commissioner towards the demand of duty confirmed by him. In Appeal No. E/1623/2002 -NB (SM), the appellants are aggrieved by this decision of the Commissioner.

(3.) Heard both sides.