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2018 (7) TMI 865 - AT - Customs100% EOU - demand of customs duty foregone on the excess quantity of imported scrap - Manufacture - Whether the activity of segregation of imported mixed brass scrap into foundry and non-foundry grade, amounts to manufacture or otherwise? - Held that:- Circular of Board dated 10/05/2016 is a clarification on the issue of segregation of impurity, namely ,iron, steel, rubber, plastic, dust etc. from honey grade brass scrap imported, albeit in the context of Rule 3(5) of CENVAT credit rule 2004, but definitely applicable to the present case - From the above clarification, it is clear that after segregation of the mixed imported scrap, the segregated scrap, if cleared, cannot be considered as clearance of “inputs as such”. The process of segregation of imported mixed brass scrap, into foundry and non foundry grade by weeding out the impurities so as to prepare it or make it suitable to feed into the furnace for manufacture brass ingots, and then finished goods, is a process integrally connected to the manufacture of brass articles - Tribunal in the case of Singh scrap Processor Ltd. Vs, Commissioner of C.Ex. [2002 (4) TMI 114 - CEGAT, MUMBAI] held the process of removal of impurity results into manufacture. Accordingly, the non-foundry scrap cleared in DTA on payment of excise duty, cannot be construed clearance of imported scrap ‘as such’. Payment of duty on the excess use/consumption scrap material, in the activity of segregation/manufacture of finished goods - Held that:- In the present case, the scrap generated during the course of segregation/manufacture of brass articles had been permitted to be cleared in the DTA by the Development Commissioner and the Appellant-assessee had cleared the scrap pursuant to the said permission and discharged appropriate excise duty on its sale. Hence, demanding customs duty foregone on the excess quantity of imported scrap worked out on the basis of the Norms fixed by the Committee is not sustainable in law. Appeal disposed off.
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