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2019 (1) TMI 562 - AT - Central ExciseValuation - inclusion of value of scrap retained by the appellant arising out of job work in assessable value - Appellant’s contention is that the job work charge already includes the value of such scrap and hence duty cannot be demanded twice on scrap value - CENVAT Credit - inputs are being used in dutiable as well as exempted goods - non-maintenance of separate records - rule 6 of CCR, 2004. Held that:- The deduction of scrap value has been made by M/s Suzlon from job charges only after arriving at assessable value. It is only if the conversion charged gets reduced on account of retention of scrap that the value of scrap/ waste has to be included in assessable value which is not the case here. Apart from above, it is also a fact that the scrap retained by the Appellant was also cleared by them on payment of duty. If the value of scrap is deducted from the value of raw material and added to the job charges, the assessable value would remain same - as the Appellant has already included the scrap cost in job work charges and hence there is no reason to include the scrap value again in assessable value. The job work charges are not reduced by the value of scrap neither there is any evidence to allege so - duty demand not sustainable. Demand has also been made on the ground that cenvat of raw material is also to be added to the assessable value - Held that:- There is no reason to demand duty on value equal to cenvat amount of raw material. Valuation - Held that:- The quantum of scrap and value of same has been adopted in show cause notices on the basis of average of entire production of all products irrespective of fact that the products are of different design/ specification products/ towers etc. - as the scrap generation can vary as per the product, hence the valuation method adopted by the revenue is not sustainable. Hence no demand can be made on such basis. Appeal allowed - decided in favor of appellant.
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