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TMI Blog2017 (11) TMI 1477X X X X Extracts X X X X X X X X Extracts X X X X ..... he Schedule to the Central Excise Tariff Act, 1985. The appellant has got five units but the dispute is pertaining to the unit situated at Bhiwadi, Rajasthan. 2. Brief facts of the case are that:- i. The appellant has five manufacturing units, all registered with Central Excise, engaged in the manufacture of Aluminum alloy in Molten/Ingots form from aluminium scrap, both imported and indigenous. These five units are located at Tatarpur, Dist Palwal (Haryana), Haridwar (Uttarakhand), Gurgaon (Haryana), Tapukara, Bhiwadi (Rajasthan) and Manesar (Haryana). Bulk of the imported scrap is imported through ICD, Dadri (U.P.) To attend to the import formalities and transportation of the imported scrap, the company also has an office at Dadri whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the remaining part of the consignment (in full containers) was sent to the other units of the company accompanied by photocopies of the said Bill of Entry. The appellants used to take Cenvat Credit of the CVD and SAD on the strength of such challans accompanied by photocopies of the bill of entries. The department was of the view that such challans are not valid documents for availing Cenvat Credit in terms of Cenvat Credit Rules, 2004 and vide the impugned order, such Cenvat Credit amounting to Rs. 3,71,54,802/- covering the period 13/11/14 to 30/09/15 was disallowed. 3. The second part of the present dispute is that for manufacture of Aluminum Ingot the appellant imported scrap. The imported scrap is first examined and segregated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as challan and packing list under which the imported goods were dispatched. He further submitted that the full details were already placed before the Adjudicating Authority but he chose not to give any finding on such elaborate submission and has disallowed Cenvat Credit. 6. The Ld. DR justified the impugned order pertaining to disallowance of Cenvat Credit. He argued that the challan issued based on which Cenvat Credit has been availed is not a proper document specified under Rule 9 (1) (a) (ii) accordingly, he argued that the Cenvat Credit merits to be disallowed. 7. After hearing both sides we find that the scrap has been imported by the appellant in a consolidated manner for all the five units of the appellant. Further such imported s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter to the Adjudicating Authority for examination of the documents and to pass de novo order. 9. Next we turn to the second issue before us. The imported Aluminum scrap has been segregated after receipt of the same in the factory and portion of this scrap other than that of Aluminum have been cleared and duty paid on the basis of transaction value. The view of the Revenue is that this amounts to clearance of inputs as such and will incur the mischief of rule 3 (5) of the Cenvat Credit Rules, 2004 and requires reversal of credit availed on this portion of the scrap. 10. We note that a similar issue pertaining to segregation of copper scrap has arisen in the past and Circular No. 1029/17/2016 CX dated 10/05/2016 was issued by CBEC. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign materials segregated initially and not fed in furnace. The issue is when such segregated foreign material is cleared by the brass manufacturers, can it be treated as clearance of "inputs as such" and accordingly are the 1 manufacturers required to pay an amount equal to the credit availed in respect of such inputs in terms of Rule 3(5) of CENVAT Credit Rules, 2004. 3. The issue has been examined. Segregation from honey grade brass scrap in order to weed out other foreign materials before the process of melting in the furnace is an essential process relating to manufacture of brass articles. The foreign materials, emerging during the process of segregation have to be treated as process waste and cannot be treated like removal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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