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2019 (4) TMI 1328 - AT - Central ExciseCENVAT Credit - input - inputs received in wooden containers and/or pallets - whether the pallets, being the packing materials of the said finished goods were treated as inputs in the manufacture of the said goods - HELD THAT:- The pallets which were purchased by the Appellant @40/- per Kg. Were sold @Rs. 11/- per kg. under the description “Scrap Wood/broken Pallet’. There was no allegation that the price charged was not the transaction value and that the such sale was undervalued. Nor was there any allegation that the sales were made to related persons.This price difference weighs heavily against the allegation by the department that the pallets were removed as such. The Appellant has claimed that they had included the value of pallets in the value of finished, for the purpose of paying excise duty, even when such finished goods were packed with recycled/returned pallets on which no CENVAT credit was availed by them. Central Excise Rules provides for imposition of duty on the waste arising out of the manufacturing process, but the packaging materials cannot be termed as waste arising out of manufacturing process. Hence, it may be concluded that no duty is payable when unusable or redundant packaging materials are removed from the factory, nor reversal of CENVAT credit is warranted. Appeal dismissed - decided against Revenue.
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