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2016 (7) TMI 289 - CESTAT CHANDIGARH

2016 (7) TMI 289 - CESTAT CHANDIGARH - 2016 (344) E.L.T. 545 (Tri. - Chan.) - Cenvat Credit - Demand of reversal of credit on removal of waste - appellant 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. - Held that:- appellant is not requir .....

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ucts alongwith interest and imposition of penalty. 2. The facts of the case are that the appellant engaged in the manufacture 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 i .....

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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 arisen as waste and scrap. She also drew my attention to Circular No. B-4/7/2000-TRU dated 3.4.2000 clarifying the position that cenvat credit shall be admissible in respect of th .....

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ve been cleared without payment of duty by the appellant. I have gone through the provisions of Rule 57D which are extracted below : - 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 pro .....

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or capital goods are not chargeable to duty of excise. 7. On bare reading of the said provision, it is clear that the appellant is not required to reverse the credit on inputs contained in waste and scrap and the appellant is not required to pay duty. The same has been clarified by the CBEC s Circular dated 3.4.2000which has been extracted below : - 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 .....

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ectly. 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 .....

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l rate of duty or is not specified as a final product under Rule 57A. (2) Credit of specified duty shall also not be denied or varied in case any intermediate products have come into existence during the course of manufacture of final products or the inputs are used in the manufacture of capital goods as defined in Rule 57Q and such intermediate products or capital goods are not chargeable to duty of excise. It can be noticed from the above reproduced rule that the rule specifically indicat .....

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ere notified vide Notification No. 11/2000-C.E. (N.T.), dated 1-3-2000; there are no provisions which are para materia to Rule 57D. In the current Cenvat Credit Rules also there are no provisions like Rule 57D of Central Excise Rules, 1944 but we find that the Government of India vide C.B.E. & C. Circular No. B/4/7/2000-TRU, dated 3-4-2000 at the time of enacting new Cenvat Rules had given the following clarification. Government of India Ministry of Finance (Department of Revenue) Central Bo .....

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es and the Cenvat rules have now been notified vide Notification No. 27/2000-C.E. (N.T.), dated 31st March, 2000. These come into force w.e.f. 1st April, 2000. 3. The definition of capital goods has been revised. The revised definition is comprehensive enough 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 .....

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e, 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. Similarly, Cenvat should not b .....

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received, the manufacturer shall debit the Cenvat credit attributable to such inputs or capital goods, otherwise it will be an offence. However, the manufacturer shall be entitled to take Cenvat credit as and when the goods sent to the job worker are received back. If part of the goods are received back within 180 days and the rest of the goods are received back after 180 days, the obligation for debiting the credit shall arise only in respect of Cenvat credit attributable to that part which is .....

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llation of capital goods as a pre-requisite for taking Cenvat credit. The credit can be taken as and when the capital goods are received in the factory. For such capital goods which were received prior to 1-4-2000 but not installed up to 1-4-2000 also, the Cenvat credit would also be admissible. It may, however, be noted that in respect of all capital goods whether received on or after 1-4-2000 or those that were received prior to 1-4-2000 but not yet installed, the condition that Cenvat credit .....

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cial 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 cred .....

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