TMI Blog2016 (7) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... e misc. edible preparations and was removing wastes of their cenvatable invoices like laminates, shipper carton, duplex, perform (water bottles) hydrogenated vegetable fats and wastes of their noodles without recording the same in the statutory records and on the strength of an invoice book and without discharging duty liability thereon. Therefore, a show cause notice was issued to the appellant to deny the credit on the inputs contained in waste and scrap cleared by the appellant. Both the lower authorities confirmed the demand alongwith interest and penalty was also imposed on the appellant. Aggrieved with the said order, the appellant is before me. 3. Learned Counsel for the appellant submitted that the period in dispute is from December, 1999 to September, 2004. During the period Rule 57D of Central Excise was in force and in 2002 Cenvat Credit Rules, 2002 was introduced by replacing the Central Excise Rules, 1944 to deny credit on the inputs contained in waste and scrap. She further submitted that Rule 57D of the erstwhile Central Excise Rules, 1944 clearly states that the appellant is entitled to take credit on the inputs and is not required to reverse the credit which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be denied if the inputs are used in any intermediate of the final product even if such intermediate is exempts from payment of duty. The basic idea is that Cenvat credit is admissible so long as the inputs are used in or in relation to the manufacture of final products, and whether directly or indirectly. 8. Further, the issue came up before this Tribunal in the case of Geltec Ltd. (supra), it has been observed by this Tribunal as under : - 5.2 The first submission made by the learned Counsel as to whether the remission will be applicable or not need not be gone into as we find that the appellant s case is clearly covered by the situation as envisaged in erstwhile Rule 57D of Central Excise Rules. The provisions of Rule 57D as it existed during the relevant period reads as under. Rule 57D : Credit of duty not to be denied or varied in certain circumstances - (1) Credit of specified duty shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse, or by-product arising during the manufacture of the final product, or that the inputs have become waste during the course of manufacture of the final product, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to specifically include components, spares and accessories as also other capital goods like moulds and dies, refractories and refractory materials, etc. It may be clarified that the components, spares and accessories may fall under any Chapter but they should be components, spares and accessories of the goods specified in Clause (a)(i) of Rule 57AA. , 4. It may also be clarified that even air-conditioners and refrigerating equipment and computers would be eligible to Cenvat credit as capital goods. The only condition is that the manufacturers should use them in the manufacture of final product. Clearly, therefore, such of the goods which are used in the offices of the factory are not eligible to Cenvat credit. For example, an air-conditioner used in the office premises or a computer used in the office premises of the factory shall not be eligible to Cenvat credit. 5. Some doubts have been raised whether Cenvat credit would be admissible on the part of input that is contained in any waste, refuse or by-product. In this context it is clarified that Cenvat credit shall be admissible in respect of the amount of inputs contained in any of the aforesaid waste, refuse or by-product. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Textile Articles) Act, 1978, and the additional duty of excise payable Under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The credit of equivalent CVD component on imports shall also be admissible. However, such credit can be used only for payment of the respective kind of additional duty on the final product. 10. Provision has also been made for dealing with credit in relation to inputs used in the manufacture of final products which are exported. These provisions are on the same lines as in the case of Modvat rules. 11. In the Cenvat scheme, the documents on which Cenvat credit can be taken have been prescribed to enable verification, where needed, by the department. The admissibility of the amount of Cenvat credit should be discernible from the records of the manufacturer, including the payment made to the sellers of inputs and capital goods. The, basic responsibility is upon manufacturer to prove that inputs or capital goods were purchased and wore used by him for the intended purpose. 12. You are requested to kindly impress upon the officers to go through the Cenvat rules and apply them in the spirit the Cenvat scheme has been announced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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