2016 (11) TMI 269 - AT - Central Excise

Reversal of Cenvat credit - Demand - Held that - the bone of the contention in the case is whether the respondent is required to pay duty on the scrap on the cenvat credit availed on the inputs and capital goods - Tribunal s decision in respondent s own case in order dated 16.04.2015 relying upon various judgments in para 6 held in favour of the respondent who was an appellant in that case - Decided in favor of the assessee.

Summary

Issues:
- Reversal/demand of duty on broken glass bottles during filling of aerated bottles
- Availment of cenvat credit on duty paid on broken bottles
- Classification of scrap of glass bottles under various chapter headings
- Liability of duty on scrap generated during manufacturing

Analysis:
The appeal pertains to the issue of duty reversal/demand on glass bottles broken during the filling of aerated bottles, where the respondent availed cenvat credit on duty paid for such bottles. The adjudicating authority claimed duty demands equivalent to the cenvat credit availed. The first appellate authority, referring to a Tribunal decision in a similar case, set aside the original order and allowed the appeal.

The Departmental Representative argued that the scrap of glass bottles, iron, and steel generated in the factory should be classified under various chapter headings. It was contended that duty liability exists on scrap arising from broken bottles, citing a Tribunal decision in a similar case involving Nestle (I) Ltd. The representative also highlighted a Tribunal order in the respondent's favor based on a similar issue.

Upon reviewing the submissions and records, the Tribunal focused on whether the respondent must pay duty on the scrap generated from cenvat credit availed on inputs and capital goods. It was acknowledged that scrap is produced during manufacturing. Relying on a previous decision in the respondent's case and other judgments, the Tribunal found in favor of the respondent, as the same issue had been decided in their favor previously.

Given the Tribunal's earlier ruling in favor of the respondent on the identical issue, the current impugned order was deemed correct and legally sound without any flaws. Consequently, the appeal was rejected, with the operative part pronounced in court.