COMMISSIONER OF CENTRAL EXCISE, CALICUT Vs. DURGA EXPORTS

JUDGEMENT

(1.) THE Revenue is aggrieved against the O -I -A No. 253/2003 -C.E., dated 26 -8 -2003. The assessees is a 100% EOU and were exporting Spliced Wood Veneers in special designs manufactured from fifth veneers imported from abroad. The imported small pieces of Veneers were joined by stitching. The waste arisen in the course of manufacture of spliced veneers is destroyed by fire under the supervision of the Deputy/Assistant Commissioner of Central Excise. Later, Revenue proceeded to recover duty on those wastes, which were destroyed by fire under the supervision of the Revenue officers. The Commissioner (Appeals), in the impugned order, has noted that proviso to sub -section (1) of Section 3 of the CE Act requires payment of duty by a 100% EOU if the goods are removed for sale in the DTA. He has noted that this provision has not been violated as there was no removal from the factory i.e. from the EOU for sale in the DTA. He has held that therefore there is no question of demand of duty in terms of this provision of the CE Act. He has further noted that the demand being of duty of excise, nowhere has the lower authority given his finding that what was manufactured was an excisable product, capable of being marketed as goods and chargeable to duty under a particular heading or sub -heading of the Excise Duty Tariff, if not under the Customs Tariff. He has noted that there is no heading or sub -heading under the CE Tariff to cover such a product. He has set aside the OIO. Revenue is aggrieved with this order and contends that the Excise Duty of Rs. 22,105/ - was payable on the waste manufactured and destroyed although under the Revenues supervision.

(2.) WE have heard the learned SDR and the respondents are not present despite notice. We find that the ground raised by the Revenue is totally unacceptable. When there is no clearance in the DTA of any excisable goods then the question of paying duty does not arise as rightly held by the Commissioner (Appeals). The waste was destroyed under the presence of the Revenue officers. The Revenue, later after a lapse of several years, again proceeded to say that the assessee ought to have paid duty on the waste which was destroyed especially when there was no removal at all. There is no merit in this appeal and hence it is rejected.