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Tansi Engineering Works, Tansi Project Cell Versus Commissioner of Central Excise, Trichy

2017 (12) TMI 617 - CESTAT CHENNAI

Waste and scrap - excisability - it appeared that appellant had removed a quantity of 22,790 MT of waste and scrap which had arisen during the course of manufacture of finished goods to one Kanishk Steel Industries without payment of excise duty - Department took the view that such waste and scrap that have arisen during the course of manufacture are excisable and dutiable - SSI Exemption - Held that: - The department has only found fault with the assessee for having removed the said waste and s .....

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nd scrap have been diverted or clandestinely sold. In any case, the broad procedural requirements of N/N. 214/86-CE, though not opted for, have been largely followed. - The waste and scrap could at best be considered as captively consumed goods, the value of which is definitely not required to be excluded under the SSI exemption notification - the value of reusable scrap which is again used in the manufacture of final products will then not form part of the aggregate value of clearances for .....

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f furniture such as steel table, chair, benches etc. On verification of records by audit, it appeared that appellant had removed a quantity of 22,790 MT of waste and scrap which had arisen during the course of manufacture of finished goods to one Kanishk Steel Industries without payment of excise duty. Department took the view that such waste and scrap that have arisen during the course of manufacture are excisable and dutiable. Proceedings were initiated against appellant which resulted in issu .....

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09 79/2010 dt. 28.5.2010 47,592 47,592/- Hence these appeals. 2. On 03.11.2017, when the matter came up for hearing, on behalf of appellant, ld. Consultant Shri P.C. Anand made oral and written submissions which can be broadly summarized as under : (i) During the year 2006-07 & 2007-08, they had cleared waste and scrap, for purposes of conversion into angles and channels. The waste and scrap was cleared to M/s.Kanishk Steel Industries, Gummidipoondi, for the job work. The appellant had raise .....

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edure, as also the small scale exemption (notification No.8/2003-CE dt.1.3.2003), could be done without payment of excise duty. (iv) For purposes of computing the aggregate value of clearance in terms of Notification No.8/2003-CE, such clearances to a job worker are not be considered or taken into account. (v) Thus, the value of waste and scrap removed to a job worker need not be added to the overall aggregate value of clearances. (vi) In this view of the matter, the appellant takes support of t .....

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been removed by appellant to Kanishk Steel Industries against delivery notes. The said quantities of scrap had been converted by the said Kanishk Steel into angles and channels and returned to appellant. The returned items were taken into stock. Also, the converted materials were received from the above company under invoices indicating after conversion. Appellants have also averred that they paid conversion charges to M/s.Kanishk Steel Industries and that the materials received back have been c .....

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teel Industries were done so only on delivery notes and the converted products had also been received back under invoices accounted for and utilized in further manufacture of final products. There is thus no allegation that the waste and scrap have been diverted or clandestinely sold. In any case, the broad procedural requirements of Notification No.214/86-CE, though not opted for, have been largely followed. 4.4 Viewed in this light, the waste and scrap could at best be considered as captively .....

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e factory of production of the specified goods: (c) .... ..... .... Therefore, when the goods recycled captively, the value will not form a part of the aggregate value. 4.5 Even when the intended goods are sent to a job worker for conversion into angles for further usage in the manufacture, the value thereof will also not form part of the aggregate value. This is derived from the observation of the Larger Bench of CESTAT in the case of Wyeth Laboratories Ltd. Vs CCE Bombay - 2000 (120) ELT 218 ( .....

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