2000 (11) TMI 772 - AT - Central Excise

Summary

Issues:
(A) Whether the appellant violated Rule 57F(3) of CER, 1944 by clearing waste and scrap of cast iron for home consumption at a duty lesser than the credit taken.
(B) Whether the appellant violated Rule 57C of CER, 1944 by removing moulding boxes made out of C.I. scrap for captive consumption without reversing the credit already taken.

Analysis:

(A) Violation of Rule 57F(3):
The Revenue contended that the appellant cleared waste and scrap of cast iron for home consumption at a duty lesser than the credit taken, violating Rule 57F(3) of CER, 1944. However, the respondents argued that Rule 57F(18) allows waste and scrap arising during processing to be cleared on payment of duty as if manufactured in the factory. The Commissioner (Appeals) set aside the duty demand, noting that the waste was not cleared "as such" but as chips and small particles of scrap, falling under Rule 57F(18). The inputs were not cleared in their original form, as confirmed by the remarks in the records. Thus, Rule 57F(3) did not apply, and the clearance was valid under Rule 57F(18).

(B) Violation of Rule 57C:
Regarding the manufacture of moulding boxes from C.I. scrap, the Revenue argued that the appellant did not reverse the credit while removing them for captive consumption, violating Rule 57C of CER, 1944. The Commissioner (Appeals) referred to another order stating that the credit on scrap was not required to be reversed as the moulding boxes were used for the manufacture of dutiable final products. The Revenue contended that the duty on moulding boxes should have been paid, followed by a credit under Rule 57Q, which the respondents did not do. However, the procedure suggested by the Revenue was not legally mandated and was revenue-neutral. The moulding boxes were considered to have emerged at an intermediate stage and used in the manufacture of final products captively, falling under Rule 57D. The plea of the Revenue was found to be without merit.

In conclusion, all four appeals filed by the Revenue were rejected based on the analysis of the issues related to the violation of Rule 57F(3) and Rule 57C of CER, 1944.