2023 (3) TMI 949 - AT - Central Excise

Seeking recovery of the amount refunded - recovery sought on the ground that the exemption in terms of the said Notification is not available to excisable commodity which is not manufactured in such units - requirement to pay duty on waste and scrap in view of the Notification No.89/95-CE dated 18.05.95 - benefit of Notification No.33/99-CE (as amended) - HELD THAT - There is no dispute in this case that the Appellant has manufactured cement as well as capital goods in the factory. During the course of manufacture of capital goods waste and scrap was also generated. Whether duty is payable on the waste and scrap is not a question here. However, it is found that the Appellant has chosen to pay duty on the waste and scrap by utilizing the CENVAT Credit. The payment of duty on the scrap has not been questioned by the Department. The Department has only questioned the payment of duty by utilizing the CENVAT Credit availed. It is found that the waste and scrap generated is also a product manufactured within the factory for which duty can be paid by utilizing the CENVAT Credit account. Hence, it is held that the payment of duty for the waste and scrap by utilizing the CENVAT Credit account was in order. For payment of duty for the cement, they have utilized the balance CENVAT Credit and the remaining duty through PLA. The refund claimed was only on the payment of duty through PLA for the cement, which is permissible as per Notification No.33/99-CE dated 08.07.1999. The payment of duty for the scrap has been correctly paid by utilizing the CENVAT Credit account and the refund of duty paid through PLA on the cement has been correctly claimed by the Appellant as per Notification No.33/99-CE dated 08.07.1999 - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the applicability of Notification No.33/99-CE dated 08.07.1999, the payment of duty on waste and scrap generated during the fabrication of plant and machinery, utilization of CENVAT Credit for duty payment, and the eligibility of the appellant for refund under the said Notification.

Applicability of Notification No.33/99-CE:
The Appellant had generated iron-scrap during the fabrication of plant and machinery and claimed refund under Notification No.33/99-CE. The Department contended that the exemption under the said Notification is not available to excisable commodity not manufactured in the covered units. The Department initiated proceedings for recovery of the refunded amount on this ground.

Payment of duty on waste and scrap:
The Appellant contended that they paid duty on waste and scrap from their CENVAT Credit Account, as they availed credit on iron and steel used in manufacturing capital goods. The Department argued that the Appellant willfully suppressed facts in their ER-I return and were not eligible for the refund under the conditions of the Notification.

Utilization of CENVAT Credit:
The Department claimed that the Appellant should have utilized all available Credit before paying from the Account Current for goods manufactured and cleared. The Appellant argued that they correctly utilized CENVAT Credit for duty payment on waste and scrap, and the remaining duty for cement was paid through PLA as per the Notification.

Eligibility for refund under Notification No.33/99-CE:
The Appellant maintained that they correctly paid duty on waste and scrap using CENVAT Credit and claimed refund for duty paid on cement through PLA. The Tribunal found that the payment of duty for waste and scrap using CENVAT Credit was in order, and the refund claimed for cement duty under the Notification was permissible.

Conclusion:
The Tribunal allowed the Appeal filed by the Appellant, stating that the payment of duty for waste and scrap was correctly made using CENVAT Credit, and the refund for duty paid on cement through PLA was rightfully claimed under Notification No.33/99-CE. The refund sanctioned was deemed to be in order, granting consequential relief to the Appellant.