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2023 (3) TMI 1525 - AT - Central ExciseLevy of Excise duty - duty on the scrap generated / cleared from the workers premises - Rule 4(5)(a) of the Cenvat Credit Rules 2001 - HELD THAT - The issue contained in these appeals have been considered in Final Order No.41307/2017 dated 26.7.2017. It is also noticed that the decision in Final Order No.41307/2017 dated 26.7.2017 was based on Rule 4(5)(a) of the Cenvat Credit Rules 2001, whereas the impugned orders have invoked Rule 4(5)(a) of Cenvat Credit Rules 2004. On perusal of Rule 4(5)(a) of Cenvat Credit Rules 2004 it is found that the said Rule has only been made further liberal and nowhere states that the waste and scrap generated at the job workers end makes the principal manufacturer liable to payment of duty on such waste and scrap. In as much the legal issue involved in this appeal has already been settled, the impugned order set aside - appeal allowed.
Issues:
Manufacturers' liability for duty on waste and scrap generated at job workers' premises. Analysis: The case involved appeals filed by M/s. Greaves Cotton Ltd. against an order dated 26.3.2013. The appellants are manufacturers of IC Engines, Power Driven Pumps, and Gen Sets. They had cleared raw materials to job workers for processing but had not received back the recoverable scrap. The duty on the scrap had not been discharged, leading to confirmation of duty liability by the adjudicating authorities. The Commissioner (Appeals) held the duty on the scrap liable and to be discharged by the appellants as the principal manufacturers. The appellants challenged this decision. The appellant's counsel argued that the appellant is not the manufacturer of the waste and scrap, hence not liable to pay duty on it. It was contended that the CENVAT Credit Rules do not make the principal manufacturer liable for duty on waste and scrap generated at the job worker's premises. The appellant cited previous orders in their favor to support their argument. The Revenue, represented by Shri S. Balakumar, supported the findings of the impugned order. The Tribunal referred to a previous order dated 26.7.2017, which had considered a similar issue. The Tribunal noted that the requirement to pay duty on waste and scrap in the hands of the principal manufacturer existed under the erstwhile Central Excise Rule 57F(3) but not under subsequent rules like CENVAT Credit Rules 2001 or 2004. The Tribunal's decision was consistent with previous judgments and subsequent orders. The Tribunal observed that the impugned orders invoked Rule 4(5)(a) of CENVAT Credit Rules 2004, while the previous decision was based on rules from 2001. Rule 4(5)(a) of CENVAT Credit Rules 2004 did not make the principal manufacturer liable for duty on waste and scrap generated at job workers' premises. The Tribunal, relying on settled legal issues, set aside the impugned order and allowed the appeals with consequential relief, if any, as per law. In conclusion, the Tribunal's decision clarified that the principal manufacturer is not liable to pay duty on waste and scrap generated at job workers' premises, as per the CENVAT Credit Rules. The judgment provided a comprehensive analysis of the legal issue and cited precedents to support the decision in favor of the appellants.
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