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2016 (3) TMI 520 - CESTAT BANGALORE

2016 (3) TMI 520 - CESTAT BANGALORE - TMI - Liability to pay duty on clearance of structural scrap - duty demand alleging suppression of facts - Held that:- Scrap arising out of working on the structural/steel procured by the appellant assessee for construction/fabrication of refinery. The said scrap cannot be considered as arising during the course of manufacturing activity within the factory premises of the appellant. Appellant was not engaged in the manufacturing of iron and steel, in order t .....

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of the appellant. In our considered view this kind of waste and scrap as indicated hereinabove cannot be dutiable in the hands of appellant as waste and scrap arising out of the manufacturing activity.- Decided in favour of assessee

Clearance of waste and scrap of inputs and capital goods, rejected/damaged inputs and capital goods - reversal of CENVAT credit - Held that:- As seen from the reproduced specimen list that the said items which are cleared by the appellant are scraps arisin .....

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f inputs or capital goods as such, question of reversal of CENVAT credit availed on such items does not arise. See Grasim Industries Ltd. (2011 (10) TMI 2 - SUPREME COURT OF INDIA ) - Decided in favour of assessee

Clearance of the inputs as such - Held that:- As seen from the records that the appellant had cleared various inputs without payment of duty. He has admitted and deposited partly some amount for the clearance of inputs as such. In view of the foregoing we are of the consider .....

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eir factory premises, more so when all the removals have been recorded in the books maintained by them - Decided in favour of assessee - E/856/2004 & E/461/2005 - Final Order No._20060-20061/2016 - Dated:- 19-1-2016 - SHRI M.V. RAVINDRAN, JUDICIAL MEMBER AND SHRI ASHOK K. ARYA, TECHNICAL MEMBER For the Petitioner : Mr. Rajesh Chandra Kumar, Adv For the Respondent : Mr.Ajay Saxena, A.R. ORDER PER : M.V.RAVINDRAN These two appeals are filed by the Revenue as well as the appellant assessee against .....

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s are, during the period April 1998 to June 2002, appellant assessee had availed CENVAT credit on various items after installation of their refinery, during the process of which, various scrap were generated and the appellant assessee cleared the same without payment of duty. Show-cause notice dated 23.04.003, alleging suppression of facts, demanded duty liability on the same which was noticed, as per the show-cause notice during the visit of the officers to the factory premises. The appellant c .....

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s. Drawing our attention to show-cause notice, he submits that the allegations in the show-cause notice are very vague and it is stated that the appellant might have cleared certain scrap which is generated during the fabrication of structures during the period in question and cleared without payment of duty as per Annexures 1,2 & 3. He would then draw our attention to the impugned order and submit that the said impugned order has come to a conclusion that scrap generated in the factory prem .....

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that appellant assessee had not fabricated any structures but has purchased duty paid structurals that were used to set up refinery and scrap obtained out of duty paid bought out items on which MODVAT/CENVAT credit was not taken, the question of payment of duty does not arise and hence they were cleared without payment of duty. It is his submission that every clearance has been recorded by the appellant assessee as they are public sector undertakings. He would rely upon the following judgements .....

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s Ltd [2008(229)ELT 159 (Tri-Mum)] 9) CCE Bangalore Vs Brindavan Beverages (P) Ltd [2007(213)ELT 487(SC)] 4. Learned DR on the other hand while relying upon the same adjudicating authoritys order submits that the appellant assessee had availed CENVAT credit on various structurals. Extracts of RG 23 A & C Part I & Part II indicate that the appellant assessee had availed CENVAT credit on the items and the said items were in fact used for construction/fabrication in the refinery. He would .....

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Del)]. He would also draw our attention to the specific finding recorded by the adjudicating authority as to what are all the items that were cleared and submits that description of the items which were cleared was very specific and could have been used only by the actual users. It is his submission that the clearance of scrap was never to the scrap dealers but to the actual users is undisputed fact. 5) In rejoinder learned counsel submits that on the question of limitation, the appellant being .....

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by both sides and perused the records. 7) The issues involved in this case is regarding:- 1) The liability to pay duty on clearance of structural scrap as per annexure-1 to the show-cause notice, 2) Clearance of waste and scrap of inputs and capital goods, rejected/damaged inputs and capital goods as detailed in Annexure-2 to show-cause notice and 3) Clearance of inputs as such as detailed in Annexure-3 to the show-cause notice. 8) On perusal of the records, as regards point No. (1), we find th .....

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effected by the appellant assessee that the said items are scrap arising out of working on the structural/steel procured by the appellant assessee for construction/fabrication of refinery. The said scrap cannot be considered as arising during the course of manufacturing activity within the factory premises of the appellant. Appellant was not engaged in the manufacturing of iron and steel, in order to hold that the scrap generated would be liable to duty. This view is fortified by the judgement .....

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tivity. 9) As regards point No. (2) i.e. clearance of waste and scrap of inputs and capital goods, rejected and damaged inputs and capital goods as such, we find that Annexure-2 to the show-cause notice has alleged that the following items (few of them are listed) have been cleared by the appellant without payment of duty: It can be seen from the above reproduced specimen list that the said items which are cleared by the appellant are scraps arising during the course of manufacturing, replacemen .....

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eversal of CENVAT credit availed on such items does not arise. We find that this matter is now settled by the Apex Court in the case of Grasim Industries Ltd. (supra) and followed by the Tribunal in the case of CEAT Ltd (supra), Precot Industries Ltd (supra) and CCE Pondicherry Vs CESTAT Chennai (2013(297)ELT 498 (Mad)]. In view of the foregoing we are of the view that the demands confirmed under Point No. 2 are not sustainable. 10) As regards point No. 3 i.e. the clearance of the inputs as such .....

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