9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 100 - AT - Central ExciseCenvat Credit - Job Work - Scrap was returned - Denial of refund claim of duty - duty paid of the scrap at job-worker s premises - Held that - Ruling relied upon by the learned AR is not applicable as the said ruling relates to the period prior to March, 2000. Accordingly, following the ruling of the Hon ble Bombay High Court in the case of Rocket Engineering (2006 (6) TMI 66 - HIGH COURT BOMBAY) and also in view of the provisions of Rule 4(5)(a) of the Cenvat Credit Rules, 2004, there is no requirements made either for return of scrap from the premises of the job-worker or for payment of duty in case of non-return of the scrap. Accordingly, I hold that the appellant is entitled to refund of ₹ 5,03,878/-. The impugned order is set aside and the appeal is allowed with consequential benefit. As the amount was paid by way of debit note in the CENVAT account, the appellant is entitled to take back credit of the said amount in their CENVAT Credit account. - Decided in favour of assessee.
Issues:
- Appeal against rejection of refund claim for duty paid on scrap at job-worker's premises. - Interpretation of Rule 4(5)(a) of the Cenvat Credit Rules, 2004. - Application of doctrine of unjust enrichment. - Comparison of provisions under Central Excise Rules, 1944 and Cenvat Credit Rules, 2004. - Precedents regarding payment of duty on scrap generated at job-worker's premises. Analysis: Issue 1: Appeal against rejection of refund claim The appellant, a manufacturing company, filed a refund claim for duty paid on scrap generated at their job-worker's premises. The claim was rejected by the Commissioner of Central Excise (Appeals), Mumbai -I. The rejection was based on Rule 4(5)(a) of the Cenvat Credit Rules, 2004, which stipulates conditions for allowing CENVAT Credit even if goods are sent to a job-worker. The rejection also invoked the doctrine of unjust enrichment, stating that the appellant failed to prove that the duty paid on scrap was not included in the assessable value of the final products. Issue 2: Interpretation of Rule 4(5)(a) The appellant argued that under the previous Central Excise Rules, waste generated during operations had to be returned to the manufacturer, but this provision was absent in the Cenvat Credit Rules, 2004. They contended that Rule 4(5)(a) does not mandate reversing credit or paying duty on scrap not returned by the original manufacturer. Citing the case law Commissioner of Central Excise, Pune-II Vs. Unique Auto Assemblies Pvt. Ltd., the appellant claimed that duty on scrap generated at job-worker's premises should not be imposed on the principal manufacturer. Issue 3: Application of unjust enrichment The Tribunal considered the doctrine of unjust enrichment in light of the appellant's claim. Relying on the ruling of the Hon'ble Bombay High Court in a similar case, the Tribunal held that no duty liability exists for scrap generated at the job-worker's premises under Rule 4(5)(a). Consequently, the appellant was deemed entitled to a refund of the duty paid. Issue 4: Comparison of provisions under old and new rules The appellant highlighted the change in provisions from the old Central Excise Rules to the current Cenvat Credit Rules. They argued that the absence of a specific requirement for returning scrap or paying duty on non-returned scrap indicates a shift in the legal framework, supporting their claim for a refund. Issue 5: Precedents regarding duty on scrap from job-worker's premises The Tribunal referenced precedents, including the case of Rocket Engineering Corporation Ltd., to support the appellant's position. The Tribunal distinguished earlier rulings and concluded that the appellant should be granted a refund based on the provisions of Rule 4(5)(a) and relevant case law. In conclusion, the Tribunal allowed the appeal, set aside the impugned order, and granted the appellant a refund of the duty paid on scrap generated at the job-worker's premises, emphasizing the absence of duty liability under Rule 4(5)(a) and the inapplicability of the doctrine of unjust enrichment in this scenario.
|
