2017 (5) TMI 1015 - AT - Central Excise

CENVAT credit - sale of waste and scrap of various metals arising within the factory including used capital goods - non-payment of central excise duty - Held that - an identical issue has come up before this Tribunal in the assessee-Respondents own case M/s Ultra Tech Cement Ltd. vs CCE&ST, Raipur 2016 (9) TMI 1234 - CESTAT NEW DELHI , where it was held that in view of the settled principles of law, we are not in agreement with the findings of the lower authority that prescription of Chapter Note in the tariff will create the duty liability on the waste and scrap of metal goods arisen during the course of repair and maintenance of plant and machinery - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
Department's appeal against dropping of demand for excise duty on waste and scrap generated by the assessee-manufacturers availing Cenvat Credit.

Analysis:
The Department filed an appeal against the dropping of a demand for excise duty on waste and scrap generated by the assessee-manufacturers during the period of April 2008 to November 2008. The manufacturers were engaged in the production of Cement and clinker and were availing Cenvat Credit benefits. The dispute arose when it was discovered that the manufacturers had sold waste and scrap, including used capital goods, on which Cenvat Credit was availed without paying duty. The Commissioner (Appeals) had ruled in favor of the manufacturers, leading to the Department's appeal.

During the proceedings, both the Department's representative and the manufacturers' counsel presented their arguments. The Tribunal noted that a similar issue had been addressed in the manufacturers' own case for an earlier period. In that case, it was established that the definition of "waste and scrap of metals" in the Central Excise Tariff Act was for determining the applicable rate of duty and not related to the term "manufacture." The Tribunal cited previous judgments to support its decision.

Based on the precedent set in the manufacturers' previous case and the interpretation of relevant legal provisions, the Tribunal upheld the Commissioner (Appeals)'s decision to drop the demand for excise duty on waste and scrap. The Tribunal found no grounds to interfere with the impugned order and dismissed the Department's appeal. The judgment was dictated and pronounced in the open court, concluding the legal proceedings.