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2017 (1) TMI 283 - AT - Central ExciseRecovery of CENVAT credit - removal of miscellaneous waste and scrap as cenvatable goods - Held that: - as regards the packing materials removed as waste and scrap by the appellant, it was held that such waste cannot be treated as arisen out of any manufacturing process and no duty is required to be paid / cenvat credit to be reversed - duty demand on packing material is liable to be set aside. With regard to oily cotton canvas, which were removed in the form of scrap, cannot be considered as input for the appellant, who manufactures biscuits. Thus, I am of the firm opinion that said goods are not the input for the appellant. Thus, removal of such goods as scrap will not attract payment of central excise duty/ reversal of cenvat credit. with regard to the wooden scrap namely, doors, windows, iron rods etc., which have no relation with the manufacture of the final product and obviously there was no scope on the part of the appellant to avail the cenvat credit. Thus, duty liability cannot be fastened on removal of those goods as waste and scrap. With regard to plastic scrap, the Ld. Advocate states that the same were generated during the course of manufacture/ packing of the final product. Since, initial procurement of plastic were not input as such and were not generated during the course of manufacture of the final product, on removal of the same as waste and scrap, no duty is required to be paid. With regard to iron and steel items removed as scrap, the appellant has not produced adequate documents to demonstrate that no cenvat credit were taken. The matter should go back to the original authority for verification of records/ documents maintained by the appellant - matter remanded. Imposition of penalty u/s 11AC of the Central Excise Act, 1944 - Held that: - Since, the information were gathered by the department from the balance sheet of the appellant, no malafide can be attributed, justifying imposition of penalty under Section 11AC ibid - penalty set aside. Appeal diposed off - decided partly in favor of assessee - part of matter on remand.
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