TMI Blog2013 (7) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... DGMENT (The Judgment of the Court was made by Chitra Venkataraman, J.) The Revenue is on appeal as against the order of the Customs, Excise and Service Tax Appellate Tribunal passed in Nos.496 and 497/2008 dated 29.05.2008 raising the following substantial questions of law :- "1. Whether the first respondent was right in holding that it 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 man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble ; such worn out parts were replaced by new parts. The scrap so cleared by the assessee was during the period from 01.02.2003 to 30.11.2003 and 01.12.2003 to 31.08.2004. During this period, there was no provision for the demand of duty on the waste and scrap of the capital goods in the Cenvat Credit Rules, 2002/2004. Based on Rule 3(4) of Cenvat 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. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and metal goods. From the admitted fact that the scrap are the material waste not arising out of manufacture, but arising out of worn out parts of capital goods used in the production of sugar and molasses, we do not find any justifiable ground to interfere with the order of the CESTAT. 8. The CESTAT pointed out that what was cleared was scrap of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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