2016 (8) TMI 753 - AT - Central Excise

Cenvat credit - emergence of saw dust and wood waste / scrap while manufacturing of wooden furniture - appellant submitted that the saw dust, waste and scrap of wood are not manufactured goods and they arise in the course of manufacture of dutiable final products and, therefore, Rule 6 of the Cenvat Credit Rules, 2004 are not applicable to waste products - Held that - this issue is no longer res-integra and has been decided in favour of the appellant in a series of the judgments delivered by various judicial fora. - Decided in favour of appellant with consequential relief

Summary

Issues involved: Appeal against Order-in-Appeal upholding Order-in-Original and rejecting appellant's appeal regarding classification of saw dust and wood waste/scrap under Central Excise Tariff Act, 1985.

Analysis:
1. Facts of the Case: The appellants, manufacturers of wooden furniture and other wood articles, were availing Cenvat credit on inputs. A show-cause notice alleged that besides clearing wooden furniture on payment of Excise duty, the appellants were also clearing saw dust and wood waste/scrap without payment of duty, classified under CHH 4401 3000.

2. Legal Submission: The appellant argued that saw dust, waste, and scrap of wood are not manufactured goods but arise in the course of manufacturing dutiable final products. Rule 6 of Cenvat Credit Rules, 2004 should not apply to waste products. Referring to C.B.E.C. Manual of Supplementary Instructions, the appellant claimed that Cenvat credit is admissible for inputs contained in waste, refuse, or by-products. The appellant cited various case laws to support their argument.

3. Judgment: The Tribunal found that the issue was decisively covered in favor of the appellant by the cited judgments. The Tribunal allowed the appeal, setting aside the impugned order with any consequential relief. The judgment was pronounced in open court on 19/08/2016.

This detailed analysis of the legal judgment highlights the key arguments, legal submissions, and the final decision made by the Appellate Tribunal CESTAT BANGALORE regarding the classification of saw dust and wood waste/scrap under the Central Excise Tariff Act, 1985.