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2010 (1) TMI 1105 - AT - Central ExciseCENVAT credit - Waste and scrap - whether BOPP film cleared by the appellants rejected and received back on which cenvat credit was taken, if cutting and slitting is done on the same and used in the manufacture of granules cleared without payment of duty, whether full cenvat credit is required to be reversed or it would be sufficient if duty is paid on the scrap captively used on the basis of value arrived at on scrap? - Held that: - As per the provisions of Rule 16 of Cenvat Credit Rules, if the process involved on the rejected goods does not amount to manufacture and if the resultant products are cleared, the Cenvat credit taken on the resulted goods received back is required to be reversed. In the case before us, it is seen that the appellant avails credit of the entire amount of the duty paid on rejected final products, seeks to pay the duty only on the waste and scrap, which at any stretch of imagination cannot be said to be arising out of a process of manufacture. We are of the view that the appellant cannot claim that the waste and scrap which arises from rejected goods, are due to the process of manufacture as there is no manufacture, involved in the process, as is explained by the appellant before us as well as before the lower authorities. Accordingly, we find that the impugned order, to the extent it confirms the demand is correct and legal and does not require any interference. Appeal dismissed - decided against appellant.
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