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2022 (10) TMI 317 - AT - Central ExciseCENVAT Credit - clearances of zinc dross/ ash - clearance of old plant, which consists of zinc parts - Rule 6(3)(i) of Cenvat Credit Rules, 2004 - HELD THAT - Reversal of cenvat credit on clearance of waste product namely zinc dross/ ash, the issue is squarely covered by the ruling of the Hon ble Supreme Court in the case of UNION OF INDIA OTHERS VERSUS M/S. HINDUSTAN ZINC LTD. 2014 (5) TMI 253 - SUPREME COURT . Accordingly, this issue is decided in favour of the appellant. Chargeability of duty on disposal of old plant - HELD THAT - The duty cannot be demanded on the parts of old plant, as these are not manufactured product by the appellant. Secondly, Revenue has not led any evidence about the old plant disposed, which was acquired in the year 1995-96, that the appellant had taken modvat / cenvat credit. In this view of the matter, this ground is also allowed in favour of the appellant and against the Revenue. The appeal is allowed.
Issues:
1. Whether demand of Rs. 1,87,150/- on clearances of zinc dross/ ash under Rule 6(3)(i) of Cenvat Credit Rules, 2004 is rightly raised. 2. Whether demand of Rs. 1,55,513/- on clearance of old plant, which consists of zinc parts, has been rightly made. Analysis: 1. The appellant, engaged in the manufacture of ERW Steel Tubes/ Pipes, availed cenvat credit on duties paid on inputs, capital goods, and input services. The issue arose when it was observed that the appellant sold zinc dross/ ash without duty payment during a specific period. The demand was raised under Rule 6(3)(i) of Cenvat Credit Rules, 2004, requiring payment equal to 6% of the price of such zinc dross/ ash. The appellant contested this demand, citing waste product status and relying on a Supreme Court ruling. The Tribunal agreed with the appellant, stating that Rule 6(3) is not attracted to waste products, thus deciding in favor of the appellant. 2. Another demand of Rs. 1,55,513/- was raised on the clearance of old plant parts, alleging duty payable. The Commissioner (Appeals) upheld the demand based on a Board Circular treating certain goods as exempted for credit reversal purposes. The appellant argued that no duty arises as the plant was acquired without credit. The Tribunal found that duty cannot be demanded on parts of the old plant, as they are not manufactured products by the appellant. Lack of evidence from the Revenue regarding credit taken on the old plant further supported the appellant's case. Consequently, this issue was also decided in favor of the appellant. In conclusion, the Tribunal set aside the impugned order and allowed the appeal, providing consequential benefits to the appellant. The judgment clarified the applicability of Rule 6(3) to waste products and highlighted the necessity of evidence when demanding duty on specific items.
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