TMI Blog2008 (1) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-05 was issued with the contention that the assessee had during the period September 2003 to July 2005 cleared inputs to the job worker. In the job workers premises, scrap/waste was generated which was not received back by them and therefore they were held to be not eligible to avail Cenvat credit. In this case, it is pointed out by the appellants that in terms of the provisions of Rule 57F(5) of the rules prevailing earlier to this period, the rule required the waste arising in the course of any operation to be returned to the factory of manufacturer of final product. However during the relevant period, the provision was amended and this provision was deleted by Rule 4(5)(a) which is reproduced herein below : The Cenvat credit shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext it is clarified that CENVAT credit shall be admissible in respect of the amount of inputs contained in any of the aforesaid waste, refuse or by-product. Similarly, CENVAT should not be denied if the inputs are used in any intermediate of the final product even if such intermediate is exempt from payment of duty. The basic idea is that CENVAT credit is admissible so long as the inputs are used in or in relation to the manufacture of final products, and whether directly or indirectly. 4. It is the submission of the learned counsel that this issue is covered by the ruling rendered in the case of CCE, Meerut v. Shakumbari Sugar and Allied Industries Ltd., 2004 (176) E.L.T. 819 (Tri.-Del.) would apply to the facts of the case. He re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rule 57 F(5) earlier to the period in question required the waste to be returned to the factory of manufacturer of final product. However the amended Rule 4(5)(a) applicable to the period in question as reproduced above refers only to return of the final product within 180 days and it does not have any specific provision with regard to return of waste/scrap. Return of final product is not disputed. The board has clarified in para 5 of their letter dated 3-4-2000 extracted supra that Cenvat credit cannot be denied on the waste/refuse or by-product. This issue has been clarified in the case of CCE v. Shakumbari Sugar Allied Industries Ltd., in para 4 which is extracted supra. In terms of this case, the assessee is eligible to avail Cenva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuts that preparing them for use and marketability, even by the addition of preservatives and other materials, does not amount to manufacture of new products. The factual situation in the case of the instant cotton waste is even worse. It is not even the result of making natural materials fit for use. That is the case in Arihant Cotsyan since the cotton in question was used for spinning into yarn. In regard to soft waste, the processes are of elimination and separation of unusable material, the resulting residue is not a manufactured item. The appellant s case is also supported by the ruling of the Hon ble High Court of Delhi that waste material is not a new item having a distinct name, character or use so as to be treated as a manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X
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