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TMI Blog2013 (7) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not established that the impugned goods arose from any process of manufacture ? 2. Whether the first respondent was correct in denying the reliance placed by Revenue on note 8(a) of the Section XV of the Central Excise Tariff Act, 1985 as it has been clearly established that the impugned goods arose due to 'Mechanical Working' ? " 2. It is seen from the facts narrated that the assessee is a manufacturer of sugars and molasses. They have availed Cenvat credit on their capital goods. It was noted that metal scrap were generated out of scrapping of the capital goods (Machinery and components). The assessee cleared M.Tons of M.S./C.I.Scrap and M.S./C.I.Borrings valued at Rs.13,28,551/- without payment of duty from the period 01.02.2003 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Credit Rules, 2002, the First Appellate Authority held that Rule 3(4) of the Rules as it stood at the relevant time made no provision on the reversal of credit or payment of duty by the manufacturer on the waste and scrap of the capital goods at the time of their clearance. Under Notification No.27/2005, Sub Rule 5A to Rule 3 of Cenvat Credit Rules, 2004 was brought into effect from 16.05.2005. Thus duty liability would be applicable only from 16.05.2005. In the circumstances, the Appellate Authority held that when the scrap had not arisen out of manufacture, but arising on account of wear and tear in the absence of specific provision for such waste and scrap in the relevant rules, duty could be demanded. 5. Aggrieved by this, the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worn out capital goods. The show cause notice did not contain details as to whether the Iron and Steel items were manufactued by the assessee that the scrap are generated in the course of such manufacture. In any case, the CESTAT pointed out that the Revenue had not pointed out that the assessee had manufactured Iron and Steel goods or components. 9. Having regard to the above said fact that the expression 'scrap' is defined as metal waste and scrap from the manufacture or mechanical working of metal and metal goods and on the nature of manufacturing activity of the assessee, viz., production of sugar and molasses, we have no hesitation in confirming the order of the CESTAT, thereby, rejecting the contention of the Revenue. Accordingly, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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