TMI Blog2019 (4) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... by the department that the pallets were removed as such. The Appellant has claimed that they had included the value of pallets in the value of finished, for the purpose of paying excise duty, even when such finished goods were packed with recycled/returned pallets on which no CENVAT credit was availed by them. Central Excise Rules provides for imposition of duty on the waste arising out of the manufacturing process, but the packaging materials cannot be termed as waste arising out of manufacturing process. Hence, it may be concluded that no duty is payable when unusable or redundant packaging materials are removed from the factory, nor reversal of CENVAT credit is warranted. Appeal dismissed - decided against Revenue. - Appeal No. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e packing materials of the said finished goods were treated as inputs in the manufacture of the said goods in terms of Rule 2(k) of the Cenvat Credit Rules and their costs were duly included in the value of the said goods on which duty was paid by the assessee. It is the case of the assessee that since the purchased pallets was used as packing materials and qualified as inputs, they accordingly availed credit of the duty paid on the said pallets. 2. Two Show Cause Notices dated 10.04.2014 and 14.10.2014 were issued for the period from April, 2009 to June, 2014 alleging that the respondent assessee had removed convertible input of pallets/MDF Board Pallet without payment an equivalent amount of Cenvat credit. The Adjudicating A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r No. 721/37/2003-CX (Supra) and also in view of the decision of the Apex Court in the case of West Coast Industrial Gasses as reported in 2003(155)E.L.T. 11 SC. As regards the returned recycled pallets, it is his submission that since the same were returned and brought into the factory premises without any duty credit being taken, there was nothing to reverse. As the returned pallets are totally distinct from the procured pallets, credit was taken by the assessee on the procured pallets only. 6. Heard both sides and perused the appeal records. 7. On perusal of records I find that the lower Appellate Authority has discussed the issue at length and has passed a reasoned order. The relevant paragraph of the impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cenvatable input materials were received at the time of clearance from factory, I find that the issue has already passed through judicial scrutiny when Department s appeal against CESTAT order in the case of M/s. West Coast Industrial Gases Ltd. Vs. Commissioner of Central Excise was finalized in the Apex Court [2003(155)E.L.T. 11(S.C.)] and riding upon the outcome the CBEC issued the Circular No. 721/37/2003-CX dated 06.06.2003 as guidance to be followed by the department in similar instances which is reproduced as follows: I am directed to refer to Board s Circular No. 470/36/99-CX dated 19.7.99 on the above subject whereby the field formations were informed that the Department s appeal against the CEGAT order in case of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of plastic waste was not sustainable. Again similar views were also expressed in the following cases as reported in (i) 2004 (167) E.L.T. 240 (Tri.-Del), (ii) 2004(170) E.L.T.31 (Tri.-Kolkata), (iii) 2005(185) E.L.T. 183 (Tri.-Del) (iv) 2005(182) E.L.T. 371 (Tri.-Del). Moreover, I find that Central Excise Rules provides for imposition of duty on the waste arising out of the manufacturing process, but the packaging materials cannot be termed as waste arising out of manufacturing process. Hence, it may be concluded that no duty is payable when unusable or redundant packaging materials are removed from the factory, nor reversal of CENVAT credit is warranted. I, therefore, find it will be most just and appropriate if the instant case is d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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