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TMI Blog2023 (3) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... ecords (i.e. delivery notes) that they had sent inputs/partially processed inputs for further processing under Rule 4(5)(a) of Cenvat Credit Rules, 2004 to the various job workers. It appeared that the assessee received only semi finished goods; while scrap generated during the process carried out by the job worker was not returned to the assessee. The assessee vide their letter dated 10.12.2009 had confirmed that the job workers have cleared the scrap without payment of duty after availing benefit of SSI exemption. The 'scrap' generated during the process of manufacture of the final product was excisable goods classifiable under Chapter Heading 7204 1000 of Central Excise Tariff Act, 1985, which was a final product within the meaning of definition of Rule 2(h) of Cenvat Credit Rules, 2004 read with Section 2(d) of Central Excise Act, 1944. Therefore the assessee was liable to pay duty on such scrap irrespective of whether it was generated within its own factory or within the factory premises of the job worker working under Rule 4(5) of Cenvat Credit Rules, 2004. Value of scrap for arriving at the value and calculating the Central Excise duty payable is considered as Rs. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely avoids bringing the goods to the manufacturers premises, it does not extinguish the duty liability of the manufacturer. There is nothing in the rules to indicate that the scrap arising at the job workers premises should not be brought back or that duty would not be payable on such scrap. Liability to duty does not ceases merely by not bringing the goods or scrap back to the manufacturer's premises. 09. Whereas 'scrap' generated during the processing of inputs of the respondent, at job worker's factory premises is excisable goods classifiable under Chapter sub-heading 72041000 of Central Excise Tariff Act, 1985, which is a final product within the meaning of the definition of Rule 2(h) of Cenvat Credit Rules, 2004read with Section 2 (d) of Central Excise Act, 1944. Therefore, it appears that the respondent is liable to pay duty on such scrap irrespective of whether it was generated within its own factory or within the factory premises of the job worker working under Rule 4(5) Cenvat Credit Rules, 2004. 10. The scrap generated during the processing of inputs send under Rule 4(5) of Cenvat Credit Rules, 2004, at the job worker's premises was required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authority dropping the proceedings is not legal and proper. I therefore, allow the Revenues appeal and accordingly pass order. ORDER I allow the Revenues appeal and set aside the impugned order of the lower authority and confirm the demand as set out in the Show Cause Notice under Section 11A of Central Excise Act, 1944 alongwith equal penalty under Rule 25 of Central Excise Rules, 2002 read with Section 11AC, and with interest under Section 11AB of Central Excise Act, 1944." 2.0 We have heard Shri Rajesh Ostwal with Shri Saurabh Bhise, Advocates for the appellant and Shri Bhilegaonkar Deepak, Additional Commissioner, Authorized Representative for the revenue. 3.0 Issue involved in the present case is no longer res integra. 3.1 Rocket Engineering Corporation Ltd. Vs. CCE - 2005 (191) ELT 483 (T.), "Duty demand of Rs. 43,679/- has been confirmed and penalty of equal amount has been imposed upon the appellants herein on the ground that the scrap generated at job workers premises during the course of manufacture of inputs for the reason that they did not get back the waste and scrap, which had arisen in the job workers premises to whom castings were sent by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner (Appeals) failed to appreciate the vital fact that nowhere in Rule 57AC(5)(a)/Rule 4(5)(a) of the Cenvat Credit Rules, there is any provision made to compel the principal manufacturer to bring back the scrap generated at the job workers' end or to pay the Central Excise duty on the said scrap. 12. The Central Excise duty cannot be demanded from the appellants since the job worker is the manufacturer of the said scrap, which is retained by him and sold in the market. 13. The similar issue is answered in the case of M/s. International Tobacco Co. Ltd. v. CCE, Ghaziabad [2004 (165) E.L.T. 314 (Tri.-Del.)]. It is observed that no process of manufacturing taking place in respect of waste and scrap generated during the course of manufacture of cigarettes. Moreover, provision for dutiability of waste and scrap existed only in the erstwhile Central Excise Rules, 1944 (Rule 57F) and no such provision is there in the Cenvat Credit Rules, 2001. Duty is not leviable under Section 3 of the Central Excise Act, 1944." 3.4 In the case of M/s. International Tobacco Co. Ltd. [2004 (165) E.L.T. 314 (Tri.-Del.)], tribunal held: "4. We have considered the submissions of both the sides ..... X X X X Extracts X X X X X X X X Extracts X X X X
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