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2016 (3) TMI 1137 - CESTAT NEW DELHILevy of duty - MS Scrap - manufacture of Sponge Iron, falling under Chapter 72 of the Central Excise Tariff Act, 1985 - During the process, MS Scrap generated, which were sold by the appellant without payment of Central Excise duty. Non-payment of Central Excise duty on the MS Scrap was disputed by the Central Excise Department - decision in the case of Hindustan Zinc Ltd. vs CCE Jaipur-II,[2011 (5) TMI 715 - CESTAT, NEW DELHI] relied upon by the learned DR - Held that: - It is an admitted fact on record that MS Scrap was generated from MS Plate, Angles, Channels etc. Since generation of scrap was not arisen out of any manufacturing process, in my view, the appellant is not required to pay any Central Excise duty on removal of those scrap items. I find from the available records that the Department has alleged contravention of Rule 4 and 8 of the Central Excise Rules, 2002. Since scrap is not manufactured by the appellant, the said provisions have no application, because the said Rules provide for payment of duty on removal of excisable goods from the factory. In the present case, Rule 14 of the Cenvat Credit Rules has not been invoked for demanding the irregularly availed cenvat credit on the M.S. Plates, Angles, Channels etc. The decision of this Tribunal in the case of Hindustan Zinc Ltd. cited by Ld. DR is distinguishable from the facts of the present case inasmuch as the issue involved in that case relates to reversal of cenvat credit on removal of waste and scrap from the factory. Whereas, the issue involved in this case relates to payment of duty on removal of scrap from the factory and not reversal of cenvat credit. Since M.S. Scrap is not excisable goods for the appellant, I am of the considered view that invocation of Section 11A is not proper and justified for confirmation of duty demand. Therefore, I do not find any merits in the impugned order. Appeal allowed - decided in favor of appellant-assessee.
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