2009 (7) TMI 345 - AT - Central Excise

Cenvat credit on the input viz. waste and scrap of plastic (Plastic Bhusa) - respondents are engaged in the manufacture of Kraft Paper and were availing Cenvat Credit on duty paid plastic bhusa - respondents have consumed plastic bhusa as fuel for generation of steam for manufacturing of the kraft paper and further find that there is no force in the contention of the department that the respondents were not having necessary statutory permission to use the plastic bhusa as fuel, - fact of manufacturing is not disputed credit cannot be denied revenue s appeal is dismissed

Summary

The Appellate Tribunal CESTAT, Mumbai, in the 2009 (7) TMI 345 case, heard an appeal filed by the Revenue challenging the respondent's entitlement to Cenvat credit on waste and scrap of plastic (Plastic Bhusa). The respondents, engaged in Kraft Paper manufacturing, had availed Cenvat credit on duty paid plastic bhusa, which was disputed by the Revenue. The department argued that plastic bhusa did not qualify as an input, fuel, or capital good, and that the respondents did not have the necessary statutory permission to use it as fuel. Conversely, the respondents claimed to have used plastic bhusa as fuel in a marine boiler to generate steam for manufacturing kraft paper, and refuted the allegations of lacking permission.

After reviewing the records, the tribunal found that the respondents had indeed used plastic bhusa as fuel for steam generation, and that the department's contentions were unfounded. Consequently, the appeals filed by the department were dismissed, and the original order in favor of the respondent was upheld. The judgement was pronounced on 7th July 2009.