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TMI Blog2013 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to the Central Excise Appeal No.36 of 2005. The facts are taken from the record of the said appeal. M/s. Albert David Ltd., the appellant, is engaged in manufacture of goods including intravenous fluids (IV Fluids) falling under the Chapter 30 of the Central Excise Tariff Act, 1985. During the course of manufacture (iv fluids) by form fill and seal technology plastic scrap is generated as waste. The appellant availed exemption on clearance of waste and scrap under notification no.89/95-CE dated 18th of May, 1995. The stand of the appellant that waste and scrap are exempt was not accepted by the department on the ground that the appellant was also manufacturing exciseable goods other than the exempted goods. The case of the department is that the exemption under the aforesaid notification is not applicable to units where exciseable goods other than the exempted goods are also manufactured. A show cause notice dated 1st of June, 2001 was served on the appellant on the ground that the appellant has wrongly availed the CENVAT credit on plastic granules equivalent to the quantity cleared by them as wastes and scrap. Through the said notice, a sum of Rs.22,58,960/- was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enior counsel for the appellants submitted that the appellants are producing exempted goods as held by the Tribunal as well as dutiable goods in the shape of waste and scrap. The submission is that waste and scrap are finished on which duty is payable. Reference was made to Entry No.39.15 of the first schedule of the Central Excise Tariff Act, to buttress the argument that the waste and plastic scrap all finished goods are dutiable at the rate of 16 per cent. On a true and correct interpretation of Rule 57AB, where a manufacturer is producing exempted and dutiable items, is entitled to take Cenvat Credit in respect of proportionate inputs. Therefore, the duty paid on the plastic granules, which were used for manufacturing of bottles and in the process of which scrap was also recovered, Cenvat Credit is available, in respect of the duty paid on plastic granules. In reply, the learned counsel for the department refuted the above submission and submitted that the appellant has not maintained the separate accounts of exempted items and dutiable items is, therefore, not entitled to claim Cenvat Credit. Considered the respective submissions of learned counsel for the parties and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion was framed and referred to third member (Vice President) for opinion:- DIFFERENCE OF OPINION Whether CENVAT credit of the duty paid on input (plastic granules) contained in the plastic scrap which was generated in the process of manufacture of IV Fluids and cleared by M/s. Albert David Ltd. (appellant) without payment of duty and on which duty was subsequently paid as demanded by the Revenue, was admissible to the said appellant as held by Member (Judicial) OR Whether such credit was not admissible to them as held by Member (Technical). The relevant portion from order of the Vice President is reproduced below:- " I find that the manufacturer is not entitled to the CENVAT credit in case the final product is exempted from payment of duty. The appellants were receiving duty paid plastic granules, which is used in the manufacture of the final product, which is exempted from payment of duty. In this situation, I agree with the view taken by Hon'ble Member (Technical) that CENVAT credit will not be available to the appellants in respect of the inputs contained in the scrap generated during the manufacture of exempted goods. Therefore, the demand of duty equivalent to CENVAT c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CENVAT credit. - (1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of,- (i) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said First Schedule), leviable under the Act; (ii) ........... (iv) ........... (v) ........... paid on any inputs or capital goods received in the factory on or after the first day of April, 2000. Explanation.- .......... (b) The CENVAT credit may be utilised for payment of any duty of excise on any final products manufactured by the manufacturer or for payment of duty on inputs or capital goods themselves if such inputs are removed as such or after being partially processed, or such capital goods are removed as such. The learned counsel for the appellant submitted that scrap and waste is final product and excisable item. The duty is payable at the rate of 16 per cent. This being so, the submission is that in view of the aforestated Rules, the appellant is entitled to take credit of Cenvat paid on the inputs. At this stage, the learned counsel for the department referred the Rules-3 and 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular is relevant being contemporaneous exposition by competent authority. Although reference was made to certain decisions of the Apex Court holding that such circulars issued by the department which are against the department and favours the assessee/manufacturer is binding on the department. It is not necessary to burden this judgment by referring them. The Apex Court in Rohitash Kumar and others Vs. Om Prakash Sharma, JT 2012 (11) SC 219 has observed that rule of "Contemporanea Expositio" is a well established rule of interpretation of statutes with reference to exposition which the statute received from contemporary authorities. The Court added words of caution to the effect that such a rule must give way, where the language of the statute is plain and unambiguous. The said principle has been applied, as observed by the Apex Court in the above judgment by holding that contemporanea expositio as expounded by administrative authorities, is a very useful and relevant guide to the interpretation of the expressions used in a statutory instrument. The words used in a statutory provision must be understood in the same way, in which they are usually understood, in ordinary common pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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