9911796707
TMI Blog2011 (4) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... y Cenvat credit on inputs attributable to the waste that is generated in the factory premises during the course of its manufacture. 2. The assessee is engaged in the manufacture of Gelatin Capsules using Gelatin IP., B.P. (Spl. for export) Gelatin Tablet grade, from which Gelatin Mass Waste is a bye product. The assessee had destroyed Gelatin mass waste without reversing the credit availed on the input contained therein during the period August, 2001 to March 2006. The assessee during the relevant period has removed 863488 Kgs. of Gelatin mass waste valued at Rs. 14,84,79,560 without reversing the Cenvat credit availed on the said portion of the Inputs which works out to Rs. 2,38,32,217 (Rs. 2,37, 56,730 being the BED and Rs. 75,487 the Ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal is legally sustainable in the absence of not assigning any reasons as to why the Gelatin Mass Waste cannot be considered as excisable product leviable to duty ? (c) Whether the order of the CESTAT is legally sustainable in its interpretation of the provision of section 57D of the Erstwhile Central Excise Rules and the Board Circular No. B/47/2000, dated 3-4-2000 without considering the Board Circular No. 800/33/2004-CX, dated 1-10-2004?" The learned counsel for the revenue relied on rule 3 of Cenvat Credit Rules, 2004 and contended that the assessee was under an obligation to reverse the Cenvat Credit in respect of Gelatin waste as it falls under rule 3(5). Reliance is placed on rule 3(5) which reads as under :-- "Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise. Even if the said waste is excisable and duty is payable, that in no way enables the authorities to insist on reversal of Cenvat Credit or payment of excise duty. The entire claim is on the assumption that the input which is brought into the factory is now sought to be removed in the same condition. Then only sub-rule (5) of rule 3 applies. In the instant case, the input is not removed 'as such' from the factory premises and therefore the said rule has no application to the facts of this case and therefore there is no liability to pay excise duty on the said gelatin waste. Though gelatin waste is also excisable, when it is destroyed the Commissioner has the power to waive the payment of excise duty payable on such excisable item. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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