9911796707
TMI Blog2024 (2) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... such on payment of appropriate duties. In respect of Non foundry scrap demand was raised by classifying the goods under heads 74040022.The foundry scrap was utilized in the manufacture of finish goods went for export. The dispute in the instant case is if the appellant has utilized raw material in excess of that prescribed - in the input/ out put norms. It was alleged that appellants have utilized has excess imported raw material for the purpose as compare to the quantity eligible for manufacture of the finished goods. He placed reliance on the following Board Circular and Judgments:- 2019(368) ELT (GUJ)-CC (Prev) Vs Monarch Overseas & Others 2019(1)TMI 925 Gujarat High Court- CC (Prev) Vs Pooja Metal Ltd Final Order No. A/11068-11093/2018-Hon'ble Cestat, Ahmedabad Circular No. 1029/17/2016 dated 10.05.2016 3. Learned AR relies on the impugned order. 4. We have considered the rival submissions. We find that there are 4 customs and 2 excise appeals. In the Appeal No. E/11294-11295/2014-DB the Commissioner appeal has held that the non -foundry scrap is not classifiable under Custom Tariff header, 7404 0022 and therefore, the demand of duty and order of confiscation of non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported brass scrap. Accordingly, clearance of foreign material such as iron, steel, rubber, plastic, dust etc. cannot be treated as clearance of inputs as such. It may be noted that circular no. 62/2001-Cus dated 12.11.2001 does not apply to the issue at hand as the facts at hand are different. 4. In view of above, it is clarified that the clearance of segregated foreign materials namely iron, steel, rubber, plastic, dust etc. from honey grade brass scrap before feeding in the furnace cannot be treated as removal of "inputs as such" as envisaged under Rule 3 (5) of CENVAT Credit Rules, 2004. The segregated foreign material in such situation, as has been explained above, shall be cleared on payment of Central Excise duty on transaction value as per its appropriate classification and rate of duty determined on merits. 5. Difficulty faced, if any, in implementing the circular should be brought to the notice of the Board. Hindi version will follow." Thus even according to the CBIC the goods cannot be classified under chapter 74 as foundry scrap. The Appeals E/11294-11295/2014 -DB are therefore allowed. 5. In appeal Nos. C/13282-13284/2013 and C/13613/2013 the issue relates to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction or packaging of goods in accordance with SION for export out of India or cleared for home consumption within a period of three years from the date of import or procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow: Provided that - (a) where no SION have been notified, the generation of waste, scrap and remnants upto 2% of input quantity shall be allowed; (b) where additional items other than those given in SION are required as input or where generation of waste, scrap and remnants is beyond 2% of the input quantity, use of such goods shall be allowed on the basis of self-declared norms till such norms are fixed on ad hoc basis by the jurisdictional Development Commissioner within a period of three months from the date of self declared norms and the unit shall undertake to adjust the self-declared/ad hoc norms in accordance with norms as finally fixed by the Norms Committee for the unit. The ad hoc norms will continue till such time the final norms are fixed by the Norms Committee; (c) in case of utilization of a large number of inputs, wid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring segregation: The input raw material namely mixed metal brass scrap is not normal brass scrap as it contains brass scrap with high impurities like iron & Steel, Plastic/rubber etc. The process of segregation for physical removal of impurities form mixed metal brass scrap to produce segregated mixed brass scrap is first operation in the manufacturing process to manufacture brass items from mixed metal brass scrap. Wastage norms during the process of segregation would vary from consignment to consignment depending upon the percentage of impurities in the mixed metal brass scrap and for the process of segregation the following wastage norms are fixed: Description (after segregation) Quantity Description of Import Item Quantity Segregated/processed Mixed brass scrap 1 MT Mixed metal brass scrap with impurities like iron & steel, plastic/ rubber, etc. As per actual verified by Central Excise subject to a maximum of 1.50 MT B. Wastage norms for the manufacture of brass items from Segregated/ processed mixed brass scrap: For the next stages of manufacturing operations for the manufacture of brass items from segregated/processed mixed brass scrap following wastage norms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .26 MT of 'segregated brass scrap' 1 MT of finished product can be manufactured -therefore out of 199.076 MT of 'segregated brass scrap' the quantity of finished product to be manufactured is = 199.076/1.26 = 157.997MT But the actual quantity of finished goods i.e. brass parts manufactured = 127.872 MT (Annexure-C to the SCN). 127.872 MT of Brass parts manufactured and therefore quantity of processed brass scrap required is 127.872^ * 1.06 = 161.118MT . and therefore quantity of raw material required s=161.118^ * 1.5 = 241.677 MT. Now quantity of raw material consumed in generation of slag, a by product as per the LOP, is required to be added- Quantity of slag generated during the period is ( 11.475MT + closing balance as on 31.03.10 MT + 24.350MT quantity destroyed-35.826MT minus 7.327 MT = 28.498 MT. (Exhibit-24) Therefore quantity of raw material consumed, taking 2% of permissible limit (since no norms fixed for slag) the quantity of raw material required = 102% of 28.498 MT= 29.067 MT. -Therefore total permissible quantity of raw material comes to= (241.677+29.067)= 270.744 MT whereas the quantity of raw material consumed was 298.615 MT (Annexure B t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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