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2019 (9) TMI 669 - AT - Central ExciseCENVAT credit - items which were cleared by the appellant as scrap or as un-used items or partially used items - case of appellant is that these goods are generated out of the items procured prior to March 1994 and therefore there is no question of reversal of Cenvat credit - applicability of Rule 3(5A) of Cenvat Credit Rules, 2004 - HELD THAT:- Rule 3(5A) applies on capital goods on which credit has been taken and which are cleared as waste and scrap. The product has to be first been received as capital goods and on which the credit has been availed. Before invoking Rule 3(5A) of the Cenvat Credit Rules, 2004, it is necessary for the Revenue to establish that items of capital goods are cleared as waste and scrap and on which the appellant has availed Cenvat credit. The defense of the appellant throughout is that they have not availed Cenvat credit in respect of capital goods - There are no merit in the submissions made by the appellant. Unless Revenue establishes that they availed Cenvat credit on the capital goods which are being removed as waste and scrap, provisions of Rule 3(5A) of Cenvat Credit Rules, 2004 cannot be invoked. In these circumstances, demand under Rule 3(5A) of Cenvat Credit Rules, 2004 is set-aside. CENVAT Credit - demand on waste and scrap items lime MS Oil paint drums, spent zinc based catalyst, used therminol, comox catalyst etc., these items - HELD THAT:- The Section 2(d) defines the excisable goods and to be excisable goods, is to be first manufactured. The goods coming into existence as by-product during the process of manufacture cannot be treated as manufactured goods - Thus, even if the items cleared answered to the description under Section 2(d) of the Central Excise Act, duty can be charged only if they pass through the process under Section 2(f) of the Act - demand do not sustain. Appeal allowed - decided in favor of appellant.
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