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2016 (8) TMI 234 - CESTAT NEW DELHI

2016 (8) TMI 234 - CESTAT NEW DELHI - 2016 (338) E.L.T. 145 (Tri. - Del.) - Clearance of various item of scrap generated during the course of manufacture of excisable goods. - Held that:- scrap generated during the repair of the capital goods, cannot be said that the capital goods were cleared as waste and scrap. - Not liable to duty - decided against revenue. - Excise Appeal No.E/2103/2007-EX [DB] - Final Order No. 51678/2016 - Dated:- 2-3-2016 - MR. S.K. MOHANTY, MEMBER (JUDICIAL) AND MR. .....

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and penalties on the ground that during the period March, 1997 to March, 1998 the appellant cleared various items of scrap generated during the course of manufacture of excisable goods without payment of duty. In contravention Rules 91, 52 A, 57 S (2) C, 173 F, 173G and 226 of Central Excise Rules,1944. The Show-Cause-Notice also stated that as per Rule 57 S (2) (c) of Central Excise Rules, where capital goods are sold as waste and scrap the manufacturers shall pay the duty leviable on such wast .....

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entral Excise, Jaipur vs. Birla Corporation Ltd. - 2005 (181) ELT 263 (Tri-Del.), Grasim Industries Ltd. vs. Commissioner of Central Excise, Jaipur- 2006 (203) ELT 603 (Tri.-Del.) and several others to the effect that waste and scrap arising during wear and tear of capital goods cannot be said to be manufactured and therefore was not liable to duty. 3. Ld. D.R. for the Revenue reiterated the impugned order. 4. We have considered the contentions of both sides and perused the records including the .....

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their private gate passes without payment of Central Excise duty, (details of which are enclosed in Annexure A ), in contravention of Rules, 9 (1), 52A, 57S(2) C, 173F, 173G & 226 of Central Excise Rules, 1944. The value of these goods was ₹ 4820295/- on which the amount of duty involved @ 15% adv. Comes ₹ 7,23,044/-. As per Rule 57S (2) C of Central Excise Rules, 1944 where capital goods are sold as waste & scrap, the manufacturer shall pay the duty leviable on such waste a .....

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t of the capital goods on which the appellant had taken cenvat credit. Further, the Commissioner (Appeals) in the impugned order has confirmed the impugned demand essentially on the basis of the following paragraphs:- 7. I have carefully gone through the case records and written submissions made by the Respondent. The point for my determination is whether the waste and scraps valued at ₹ 48,20,295/- involving Central Excise duty ₹ 7,23,044/- generated in year 1997-98 is chargeable to .....

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e, there are full chances that the scrap mentioned as above is generated from the capital goods on which the respondent had availed modavt and in that situation they are liable to pay duty in view of the contemporary Rule 57 S (2) (c) of the erstwhile Central Excise Rules, 1944. The contention of the respondent that scrap was of non modavtable capital goods is not acceptable because the respondent has failed to produce evidence in their support. On the contrary, the respondent has contended that .....

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p of any particular tariff is not appearing in the particular chapter such waste and scrap will not be chargeable to any duty. Careful perusal of the above-quoted para of the order in appeal betrays the untenability of the reasoning contained therein. The Commissioner (Appeals) inter alia states that (i) the respondent has failed to prove that the above referred scrap was generated from non-modvatable capital goods, (ii) since respondent started availing modvat on capital goods from the year 199 .....

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