{"id":362472,"date":"2025-10-04T09:30:21","date_gmt":"2025-10-04T04:00:21","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=362472"},"modified":"2025-10-14T09:36:26","modified_gmt":"2025-10-14T04:06:26","slug":"old-lead-acid-batteries-from-ship-breaking-not-excisable-cestat","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/04\/old-lead-acid-batteries-from-ship-breaking-not-excisable-cestat\/","title":{"rendered":"Old\/Used Lead Acid Batteries recovered from ship not exigible to central excise duty: CESTAT"},"content":{"rendered":"
\n

Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad:<\/span> In an appeal filed against order of confirmation of the demand of central excise duty by Commissioner (Appeals), the two-member Bench of Satendra Vikram Singh (Technical Member)<\/span> and Ajaya Krishna Vishvesha (Judicial Member) allowed the appeal and held that old Lead Acid Batteries recovered from ship breaking were not excisable under the Central Excise Act, 1944<\/a> (Central Excise Act) as it did not amount to manufacture.<\/p>\n

Background:<\/h3>\n

The appellant, Madhav Industrial Corporation were engaged in ship breaking activities and manufacturing of goods and materials obtained by breaking up of ships, boats and other floating structures etc. They purchased old and used indigenous\/imported vessels, ships, boats and other floating structures and after breaking them, obtained goods and various materials. During audit of their records, it was observed that the appellant from January 2012 to February 2014 had cleared “Old and used Lead Acid Battery” without paying any excise duty by treating the same as non-excisable goods. Show Cause Notice was issued by the Department proposing to recover Central Excise duty of Rs.10,810 under Section 11-A(4)<\/a> of the Central Excise Act<\/a> along with interest under Section 11-AA and penalty under Section 11-AC(1)(a)<\/a> of the Central Excise Act<\/a> read with Rule 25 of the Central Excise Rules, 2002. The demand was confirmed by Assistant Commissioner, Bhavnagar. The Commissioner (Appeals) also upheld the order of lower Authority. Thus, the appellant filed the appeal.<\/p>\n

The appellant submitted that the appellate authority had erred in holding that the disputed goods were covered under Section XV of Central Excise Tariff Act, 1985<\/a> (Central Excise Tariff Act). The appellate authority applied Note 9 of Section XV of Central Excise Tariff Act and held that goods were leviable to excise duty as the activity of the appellant amounted to manufacture.<\/p>\n

The respondent relied on Note 9 of Section XV of Central Excise Tariff Act to allege that old and used “Lead Acid Batteries” were meant for extracting ead\/lead scrap and therefore, these should be classified under Chapter Heading 78.02 and should be leviable to central excise duty.<\/p>\n

Analysis, Law and Decision:<\/h3>\n

The issue for consideration was “whether ‘Lead Acid Batteries’ obtained from old and used ships, boats etc. were classifiable under Chapter Heading 85.07 or Chapter Heading 78.02 of the Central Excise Tariff Act?”.<\/p>\n

The Tribunal observed that under Chapter 78, Lead and Articles were covered, which included items such as unwrought lead, Lead waste & scrap, lead plates, sheets, strip and foil; Lead powder and flakes and other articles of lead such as Sanitary fixtures, Indian lead seals, blanks etc. In Central Excise Tariff Act, “Lead Acid Batteries” were separately mentioned in Chapter 85 and were classified under Chapter Heading 85.07.<\/p>\n

The Tribunal observed that the appellant was clearing “Lead Acid Batteries” to their buyers which could not be equated with “Lead waste and Scrap” classifiable under Chapter Heading 78.02 of the Central Excise Tariff Act. The Tribunal further noted that the appellant was not registered with Gujarat Pollution Control Board for processing goods like Lead Acid Batteries and therefore, they were clearing these goods to their buyers who had license\/permission from Pollution Control Board for processing old\/used Lead Acid Batteries for extraction of lead scrap.<\/p>\n

The Tribunal observed that it was evident that what was coming out of old ship were “Lead Acid Batteries” which the appellant was selling to their buyers and so their classification was appropriate under Chapter 85.07 and not under Chapter 78.02 of Central Excise Tariff Act as lead scrap. If the appellant had been processing such lead acid batteries at their own premises and then clearing Lead waste and scrap to buyers, it would have been appropriately classified under Chapter 78.02.<\/p>\n

The Tribunal allowed the appeal, set aside the impugned order, and held that old and used Lead Acid Batteries cleared by the appellant were classifiable under Chapter Heading 85.07. Since goods of Chapter Heading 85.07 were not governed by Note 9 to Section XV of the Central Excise Tariff Act, these goods did not amount to manufacture and hence, were not liable to central excise duty.<\/p>\n

[Madhav Industrial Corpn. v. CCE, 2025 SCC OnLine CESTAT 3330<\/a>, decided on: 29-9-2025<\/span>]<\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For Respondent(s):<\/span> Rajesh R Kurup, Superintendent, Authorised Representative<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The appellant was not registered with Gujarat Pollution Control Board for processing goods like Lead Acid Batteries and so they were clearing these goods to their buyers who had license from Pollution Control Board to process old\/used Lead Acid Batteries for extraction of lead 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