2019 (7) TMI 53 - AT - Central Excise

Valuation - liability of duty on the transaction value of waste and scrap of capital goods on which Cenvat credit was availed - Rule 3(5A) of Cenvat Credit Rules, 2004 - HELD THAT - There is no dispute that after inserting Rule 3(5A) in Cenvat Credit Rules, the assessee is required to pay duty on waste and scraps of capital goods on which Cenvat credit is availed. Time limitation - HELD THAT - After insertion of the provision, there is no doubt and there is no scope for the assessee to entertain any bonafide belief that whether duty is payable or not on the waste and scrap of capital goods - Appeal is not time barred. Applicability of decision in the case of SHRIRAM ALKALI CHEMICALS VERSUS COMMISSIONER OF C. EX., SURAT 2010 (8) TMI 274 - CESTAT, AHMEDABAD - HELD THAT - The issue in that case was of classification of waste and scrap and on the substantial portion of the goods, the assessee had not taken Cenvat credit. Whereas in the present case, there is no dispute that the appellant had availed Cenvat credit on the capital goods. Therefore, the decision cited by the appellant is not applicable. Appeal dismissed - decided against appellant.

Summary

Issues involved:
Whether the appellants are liable to pay duty on the transaction value of waste and scrap of capital goods on which Cenvat credit was availed for the period 2005-06 to 2006-07.

Analysis:
The appellants contested the demand raised for the mentioned period, arguing that they were unaware of Rule 3(5A) of the Cenvat Credit Rules, 2004, inserted on 16.05.2005, and hence, there was no suppression of facts. They relied on a previous tribunal judgment where a similar demand was dropped. The appellant claimed a bonafide belief that no duty was payable on waste and scraps of capital goods due to the previous ruling. However, the Revenue reiterated the findings of the impugned order.

Upon review, the Tribunal noted that post the insertion of Rule 3(5A), the assessee is obligated to pay duty on waste and scraps of capital goods with Cenvat credit. The Tribunal dismissed the appellant's argument of the demand being time-barred, emphasizing that after the provision's insertion, there was clarity on the duty liability. The Tribunal distinguished the previous case cited by the appellant, highlighting that in the current scenario, Cenvat credit was availed on the capital goods, unlike the previous case where it was not. Consequently, the Tribunal upheld the impugned orders, dismissing the appeals.

In conclusion, the Tribunal ruled that the appellants were indeed liable to pay duty on the waste and scrap of capital goods for which Cenvat credit was availed, rejecting the appellant's contention of the demand being time-barred based on a previous tribunal judgment. The decision emphasized the obligation post the insertion of Rule 3(5A) and clarified the distinction between the current case and the precedent cited by the appellant.