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M/s Sahakari Khand Udyog Mandli Ltd. Versus C.C.E. & S.T. Daman

2017 (11) TMI 760 - CESTAT AHMEDABAD

Clearance of iron waste & scrap without payment of duty - whether clearance of Iron waste and scrap after 16.06.2005 alleged to be generated out of capital goods on which CENVAT Credit availed, be subjected to duty on its transaction value or otherwise? - Held that: - a plain reading of Rule 3(5A) of CCR, 2004, inserted w.e.f. 16.06.2005 makes it clear that waste and scrap of capital goods on which CENVAT credit has been availed, if cleared from the factory then the manufacturer shall pay an amo .....

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riginal adjudicating authority to verify the evidences placed by the appellant before this forum and other evidences - appeal allowed by way of remand. - Appeal No. E/13269/2013-SM - Final Order No. A/ 13261/2017 - Dated:- 16-10-2017 - Dr. D. M. Misra, Member ( Judicial ) For Appellant: Sh. Rahul Gajera (Advocate) For Respondent: Mrs. NitinaNagori (A.R.) ORDER Per : Dr. D. M. Misra This is an appeal filed against SRP-108-DMN-2013-14 Dated 25.06.2013 passed by Commissioner (Appeals) Daman. 2. Bri .....

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in the factory, show cause cum demand notice was issued for recovery of the duty along with interest and penalty. On adjudication, the demand was confirmed with interest and penalty of equal amount. On appeal, the Ld. Commissioner (Appeals) upheld the Order. Aggrieved by the said order, the present appeal is filed before this forum. 3. The principal contention of the Ld. Advocate for the appellant is that the recovery proceeding initiated against the appellant mainly on the ground that during t .....

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vehemently argued that the waste and scrap cleared from their factory were the result of worn out parts/machines procured in 1992-93 on which no CENVAT credit as capital goods had been availed by them. It is his contention that before applying the provisions of amended Rule 3 (5A) of CCR, 2004, the onus lies on the department to show that the waste and scrap, which were cleared arose out of capital goods on which CENVAT credit had been availed. In support of his contention, the Ld. Advocate ref .....

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ressed from the knowledge of the department, the clearances of scrap during the aforesaid period had been duly reflected in their books of accounts and the waste and scrap had been cleared against commercial invoices and both the authorities below had failed to appreciate their argument that the demand is thus barred by limitation. 5. Per contra, the Ld. AR for the Revenue submitted that in view of the specific provision inserted w.e.f 16.06.2005 as Rule 3(5A) in CCR, 2004, waste and scrap of ca .....

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ating Authority or before the Ld. Commissioner (Appeals) to show that the waste and scrap on which duty has been demanded by the department, not generated out of those capital goods on which CENVAT credit had been availed. The Ld. AR further submitted that in view of the judgement of Hon ble Gujarat High Court in the case of GNFC Ltd vs. Union of India 2007 (214) ELT 18 (Guj.) waste and scrap of capital goods under Rule 57-S(2)(c) erstwhile Central Excise Rules,1944, held to be dutiable. The Ld. .....

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be generated out of capital goods on which CENVAT Credit availed, be subjected to duty on its transaction value or otherwise. Before considering the rival contentions, it is necessary to refer to Rule 3(5A) of CCR, 2004, inserted w.e.f. 16.06.2005 which reads as follows:- 3(5A) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value. 7. A plain reading of the said provision makes it clear that waste and scrap of ca .....

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