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2016 (12) TMI 1114 - AT - Central ExciseLevy of duty - Clandestine removal - recovery yield ratio - finished goods processed as job worker under Rule-4 (5) (a) of the Cenvat Credit Rules 2004 - Whether RFPL is required to discharge duty on intermediate goods manufactured on job work basis when inputs are received from EIL under Rule-4 (5) (a) of the Cenvat Credit Rules 2004? - Held that: - the issue is no more res-integra and is decided in the case of Wyeth Laboratories Ltd. Vs CCE Bombay [2000 (7) TMI 109 - CEGAT, NEW DELHI], where it was held that there is no question of holding scrap as final product and disallowing the benefit of clearance of scrap for converting into ingots, under Rule 4(5)(a) - no duty liability is attracted when goods are processed by the appellant under Rule-4(5)(a) of Cenvat Credit Rules 2004. Annexure-II challans prepared by M/s EIL contain the description of inputs, its quantity, etc and Part-II of this challan filled in by the appellant also contained the quantity of finished goods sent back to M/s EIL. In view of the above appellant is not required to discharge Central Excise duty on the finished goods processed as job worker under Rule-4 (5) (a) of the Cenvat Credit Rules 2004. Whether standard input-output norms have been rightly made applicable by the department for calculating the yield of Alloy Lead ingots manufactured by the appellant out of the raw materials supplied by EIL under job work challans? - Held that: - input output norms of 1 kg of lead for every 1.07 kg of waste & scrap can not be made applicable to all categories of waste & scrap and can be made applicable only to standards waste & scrap where metal content in the waste and scrap is 97% or more. If the department was not agreeable to the % recovery prescribed by M/s EIL then the only way to reject that could have been to have sample yield studies done by the investigation to determine recovery yield percentages. There is no evidence that any lead ingots have been cleared clandestinely except presumptions surmises & theoretical calculations based on standard Input-output norms which does not apply to the waste & scrap received by the appellant from M/s. EIL. There is no justification either for demanding duty or for imposition of penalties against the appellants - appeal allowed - decided in favor of assessee.
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