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2019 (2) TMI 566 - AT - Central ExciseCENVAT Credit - removal of inputs as such - shale stone - Revenue was of the view that the shale stone which are not actually used by the appellant, are required to be considered as clearance of the inputs and are required to reverse Cenvat credit - Rule 3(5) of Cenvat Credit Rules - Held that:- Admittedly, Rule 3(5) of Cenvat Credit Rules requires reversal of credit when inputs in respect of which Cenvat credit has been taken, are removed “as such” from the factory. Admittedly, the Cenvat credit was availed on the coal and the coal was never removed from the factory. In such a scenario, the provisions of Rule 3(5) would not get attracted. Otherwise, also when the coal is issued for washing and screening and further preparation, it can be safely concluded that the inputs stand issued for utilisation in the manufacture of the final product. After the issuance of the inputs, if waste is generated during further processes, no reversal is required to be done in terms of Rule 3(5). The shale stones have emerged during the course of manufacture of the appellant’s final product which stands initiated with the issuance of the coal. The issue also stands decided by the Tribunal in the case of Indo Rama Synthetics (I) Ltd. Vs. CCE, Nagpur [2016 (4) TMI 624 - CESTAT MUMBAI], wherein it was held that removal of the sludge settled at bottom of the tank during storage of oil cannot be held to be removal of the inputs as such so as to attract the provisions of Rule 3 of Cenvat Credit Rules, which require reversal only in case of removal of inputs “as such”. Appeal allowed - decided in favor of appellant.
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