The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that since the segregation process of waste is amount to manufacturing activity, the benefit of concessional Notification No. 23/2003 dated 31.03.2003 shall be granted to the assessee.
The fact of the case is that the appellant is a 100% EOU and has cleared paper waste after the segregation process of waste imported during the period October, 2003 to January, 2005 on payment of excise duty by availing the benefit of concessional Notification No. 23/2003 dated 31.03.2003, read with para 6.8 (A&E) of the EXIM Policy 2002 to 2007.
The Revenue was of the view that as the appellant has not made any physical export and not taken permission for DTA sales, therefore, clearance under the above said Notification under concessional rate is not eligible. Accordingly, a Show Cause Notice was issued on 18.08.2006 by invoking an extended period of limitation for demanding differential excise duty along with interest and imposing the penalty.
The two-member bench comprising Mr. Ashok Jindal, Judicial Member, and Mr. Raju, Technical Member has held that the main thrust of the Revenue is that the activity undertaken by the appellant for segregation was not covered by the definition of Manufacture w.e.f. 01.04.2002 as per EXIM Policy 2002 to 2007.
“Therefore, they are not entitled to get the benefit of Notification No. 23/03 to avail the benefit thereof for payment of duty at concessional rate,” it said.
“As the activity undertaken by the appellant amounts to manufacture, therefore, the appellant is entitled to the benefit of Notification no. 23/2003-CE dated 31.03.2003 for payment of duty at concessional rate,” the Tribunal said.
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