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2024 (4) TMI 902 - AT - Central ExciseCENVAT Credit - removal of capital goods as waste and scrap - waste and scrap of fire brick after use in the kiln during the period 2010-11 (upto February 2015) - Rule 3 (5A) of Cenvat Credit Rules, 2004 - HELD THAT - Rule 3 (5A) of Cenvat Credit Rules, 2004, though provides that in case of removal of capital goods as waste and scrap, the assessee is required to pay the duty after reducing 2.5% per quarter for the period of use of capital goods. However, the appellant have taken the support of decision of BIRLA CORPORATION LTD. VERSUS COMMR. OF C. EX., RAIPUR 2002 (11) TMI 239 - CEGAT, COURT NO. IV, NEW DELHI which deals with the provisions of 57S (2)(c) of Central Excise Rules, 1944 which provides that in case of removal of capital goods as waste and scrap, the assessee is required to pay the duty after reducing 2.5% per quarter for the period of use of capital goods. The appellant have taken the support of decision of Birla Corporation Limited which deals with the provisions of 57S (2)(c) of Central Excise Rules, 1944 where it was held that where capital goods are sold as waste and scrap, the manufacturer shall pay the duty leviable on such waste and scrap. It can be seen that the provisions for payment of duty on waste and scrap of capital goods in both the above rules are almost Pari-Materia, therefore, the decision of Birla Corporation is applicable. In view of the above decision the principal bench of Tribunal held that the use of fire brick which is dismantle from the under shell of kiln is not liable to duty as waste and scrap. Since the fact of the present case is identical to the above decision and considered view taken by the Tribunal on the identical facts, the duty on waste and scrap is not liable to be paid. In the present case also the appellant is not liable to pay the duty confirmed by the lower authority - the impugned order is set aside. Appeal is allowed.
Issues involved:
The issue involved in the present case is whether the appellant is liable to pay duty on waste and scrap of fire brick after use in the kiln during the period 2010-11 (upto February 2015) u/s Rule 3 (5A) of Cenvat Credit Rules, 2004. Summary of Judgment: Issue 1: Liability to pay duty on waste and scrap of fire brick under Rule 3 (5A) of Cenvat Credit Rules, 2004 The appellant argued that the waste and scrap of fire brick, after being used in the kiln and no longer usable even as scrap, does not require duty payment as per Rule 3 (5A). They relied on a judgment related to a similar provision in Central Excise Rules, 1944. The respondent reiterated the findings of the impugned order confirming the duty demand. The Tribunal analyzed the relevant rules and previous decisions, including the case of Birla Corporation Limited, where it was held that waste and scrap of capital goods, such as fire bricks, sold as scrap are not liable to duty. The Tribunal found the facts of the present case to be similar to the Birla Corporation case and ruled that the duty on waste and scrap is not payable. Therefore, the impugned order was set aside, and the appeal was allowed. This judgment clarifies the interpretation and application of Rule 3 (5A) of Cenvat Credit Rules, 2004 concerning the liability to pay duty on waste and scrap of fire brick after use in the kiln. The Tribunal's decision was based on the principle established in a previous case regarding similar provisions in Central Excise Rules, 1944, emphasizing that waste and scrap of capital goods sold as scrap are not subject to duty payment.
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