2004 (6) TMI 562 - AT - Central Excise

Summary

Issues: Appeal against Order-in-Appeal confirming duty payment and penalty.

The appellant challenged the Order-in-Appeal upholding the duty payment of Rs. 4,03,201 and sustaining a penalty of Rs. 1,00,000 imposed by the adjudicating authority. The duty was demanded for pig iron allegedly used in an exempted final product, while the appellants argued that the pig iron was used only for products attracting duty. They claimed to have prepared a statement showing the tonnage of material on which credit was taken and the quantity of finished products cleared on payment of excise duty, with variations in modvat calculations. The adjudicating authority noted that the appellants had taken credit for duty paid on inputs used in scrap arising in the manufacture of exempted pumps, requiring reversal of the same.

The Order-in-Appeal clarified that waste and scrap cleared on duty payment cannot be treated as clearance of finished excisable goods, leading to disallowance of credit for input quantity used in such scrap. The appellant relied on a circular by the Board stating that "Waste and Scrap" are final products within the definition under Rule 57AA(C), which was ignored in the impugned orders. Consequently, the appeal succeeded, and relief was granted in accordance with the law.