2018 (8) TMI 1083 - AT - Central Excise

Levy of Excise duty - Waste and scrap - whether on the waste and scrap cleared by the appellant, arising out of capital goods, on which credit is availed or otherwise and whether, it is liable for excise duty in terms of Rule 3 (5) of Cenvat Credit Rules? - Held that - The appellant has not produced documentary evidence to establish the various facts before the original Adjudicating Authority. However, the documents were submitted before the Commissioner (Appeal) and the Commissioner (Appeal) has not considered the same in its right perspective - matter requires reconsideration. Appeal allowed by way of remand.

Summary

Issues: Whether waste and scrap cleared by the appellant, arising from capital goods, on which credit is availed, is liable for excise duty under Rule 3(5) of Cenvat Credit Rules.

Analysis:
1. The appellant argued that the waste and scrap cleared by them is not from capital goods, and no Cenvat credit was availed on these goods. They contended that Rule 3(5) of Cenvat Credit Rules does not apply. The appellant, however, failed to provide documents to prove this before the original authority. The documents were submitted before the Commissioner (Appeal) but were not considered. The appellant highlighted previous Tribunal orders favoring them on similar issues.

2. The Dy. Commissioner (AR) supported the findings of the impugned order, emphasizing the liability of the appellant for excise duty on waste and scrap.

3. The presiding Member noted that the department demanded excise duty on various waste and scrap without confirming if they were from capital goods with availed credit. The appellant's failure to provide documentary evidence initially was rectified by submitting the documents before the Commissioner (Appeal). However, the Commissioner did not evaluate these documents properly. The Member directed the Adjudicating Authority to reexamine the matter, considering the goods, documents, and past Tribunal decisions in the appellant's favor.

4. Consequently, the impugned orders were set aside, and the appeals were allowed for remand to the Adjudicating Authority to issue a fresh order after proper verification and consideration of all relevant aspects.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD illustrates the key arguments, positions, and directives given by the presiding Member regarding the liability of excise duty on waste and scrap arising from capital goods under the Cenvat Credit Rules.