COMMISSIONER OF C. EX. Vs. NESTLE (I) LTD.

JUDGEMENT

(1.) IN these appeals at the instance of the Revenue, the common issue raised is whether the respondent assessee is liable to pay duty on glass scrap generated in its factory in the course of filling of tomato ketchup and sauces in glass bottles/jars etc. Learned Commissioner (Appeals) following the decision of this Tribunal in CCE, Delhi v. Dhillon Kool Drinks and Beverages Ltd. 2001 (130) E.L.T. 475 (T) took the view that waste and scrap arising out of broken bottles through the process of filling/hand ling etc. neither generated in the course of manufacture of glass bottles nor it could be considered as a manufactured product. He, therefore, held that the scrap arising in the factory of the assessee is not dutiable. It is contended by the Revenue that the Commissioner (Appeals) has erred in not taking into consideration the provisions contained under Rule 57F(18)(a) of Central Excise Rules, 1944. It is also pointed out that in the decision relied on by the Commissioner (Appeals) also the above -mentioned provisions in the rule were not considered. Relevant provision of Rule 57F reads as follows :

(2.) IN the two decisions viz., Charminar Bottling Co. (P) Ltd. v. CCE, Hyderabad - 2001 (134) E.L.T. 179 (T) and CCE., Delhi v. Dhillon Kool Drinks and Beverages Ltd. - 2001 (130) E.L.T. 475 (T) which were relied on by the assessee before the Commissioner (Appeals) we do not find any consideration of Sub -rule (18) Clause (a) of Rule 57F. The only question considered in those decisions was whether the waste and scrap has emerged as a result of manufacturing process on which duty liability can be imposed. In those cases the Revenue has not placed any reliance on Rule 57F(18)(a). The assessee has also no contention before us that their case will not come within the purview of Rule 57F(18)(a). Under these circumstances we hold that the scrap and waste arising out of broken bottles/jars etc. at the time of filling them by the assessee are liable to be taxed under the tariff heading 7001.10.

(3.) BUT the learned Counsel for the assessee submits that the demand is barred by limitation. The show cause notice is dated 6 -1 -2000. The period of demand is from 1 -1 -95 to 31 -5 -99. The amount involved is Rs. 1,83,790/ -. The respondent would contend that they were also under the wrong impression as to the duty liability of the scrap and waste of the bottles/jars. As mentioned earlier even the decisions were to the effect that there is no duty liability in respect of such waste and scrap. Therefore, according to the assessee they have not suppressed any fact with intend to evade duty. We find merit in this contention. The facts of the case would not justify the Revenue to take recourse to larger period of limitation. Therefore, the demand cannot be sustained. Thus, while upholding the legal position put forward by the Revenue in the appeal we dismiss the appeal for the reason that the demand is barred by limitation.