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2022 (3) TMI 935 - AT - Central ExciseIncorrect availment and utilization of CENVAT credit - ineligible import services - short payment of duty on scrap sales - HELD THAT:- In the present case, the above mentioned scrap apparently reveals that no raw material has been used for those scrap to be generated nor the said scrap is the outcome of any process or any kind of deliberation or manipulation being done by appellant to their raw material. Those are not even the by-products emerging unintentionally in the process of manufacturing as is the case of bagasse in manufacture of sugar from sugarcane as raw material. The scrap in question is purely the leftovers of the packing material or the worn out parts of the consumables used by the appellant in their premises for various activities as different from manufacture. This particular observation is sufficient to hold that even Rule 6 of CCR, 2004 will not be applicable to the scrap in question even the Explanation to Rule 6 of CCR, 2004 does not deem “non-manufactured goods” as “exempted goods” as have been defined under Rule 2(d) of CCR, 2004. Even the Hon’ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE VERSUS WEST COAST INDUSTRIAL GASES LTD. [2003 (4) TMI 110 - SUPREME COURT] has held that no duty can be demanded on the material which is used for packing of the imports on which credit has been taken when such packing material is cleared from the factory of the manufacturer. It is based upon this decision that Department had issued a Circular No.721/37 dated 6th June, 2003. As already held from the description of the scrap on which duty has been demanded, it is clear that the scrap in question is non-excisable being non-manufactured product of the appellant. The demand of duty for the said reason itself is highly improper and illegal - Appeal allowed - decided in favor of appellant.
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