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2015 (7) TMI 183 - AT - Central ExciseDuty demand on waste and scrap generated - Whether the remnant material cleared by the appellant to M/s. Shridhar Metal Works is clearance for the home consumption and leviable to excise duty or it is captive consumption and exempted under Notification No. 67/95-CE dated 16/3/1995 - clearance of Aluminium dross, Aluminium turning and Aluminium oily flash - Held that:- Part of the premises of the appellant was given on leave and licence agreement to different entity i.e. M/s. Shridhar Metal Works who is unrelated to the appellant therefore in our view the premises which is used by M/s. Shridhar Metal Works is out side premises of the appellant. Secondly M/s. Shridhar Metal Works is an independent entity who carried out job work on the material supplied by the appellant in such situation M/s. Shridhar Metal Works has independent manufacturer of aluminium ingots therefore removal of remnant material to M/s. Shridhar Metal Works cannot be treated as captive consumption and therefore the same shall not be entitled for exemption under Notification No. 67/95 - if any other person carry out the manufacture, even in the premises of another manufacturer for the purpose of job work basis it cannot be said that job worker is hired labourer therefore job work shall be treated as independent manufacture and not the premises owner It has been alleged in the show cause notice that since the scrap is a finished goods, it is not permitted to be cleared in terms of Rule 4(5)(a) to a job worker. However, it is seen that the scrap so sent to the job worker is returned back to the Appellants in the form of ingots, which is then further processed in the Appellants' unit to manufacture flats, strips, rods, which are cleared on payment of duty. Thus there is absolutely no loss of any revenue to the Government. The waste and scrap generated are the remnants emerging as a necessary consequence of the manufacturing activity of cold rolling and cold drawing of copper bar undertaken by the appellants for bringing out the final product. These waste and scrap generated during the process of manufacture instead of being disposed of in the market, is being recycled and re-converted into copper bars, by following the procedure of Rule 4(5)(a) as the appellants do not have any facility for such reconversion. They further consumed the same captively in the manufacture of excisable final product. Merely because the waste and scrap so generated has been made dutiable when sold, it cannot be said that new excisable product has been manufactured. Removal of remnant by appellant to the job worker is not liable to duty and the adjudicating authority has wrongly confirmed the duty demand and imposed penalties. Since, we have taken view that the removal of remnant is not dutiable - Decided in favour of assessee.
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