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2023 (8) TMI 1136 - AT - Central ExciseCENVAT Credit - requirement to pay duty on removal of the Brass Scrap to job worker - Rule 4(5)(a) of the Cenvat Credit Rules - HELD THAT - This issue is no more res-integra and has been settled by the decision of the Larger Bench in the case of WYETH LABORATORIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY 2000 (7) TMI 109 - CEGAT, NEW DELHI wherein it was specifically held that the word waste in Rule 57(F)(4) is to be restricted to such converted inputs which are not desired to be used any further in manufacture of final product - the decision of the Larger Bench has been upheld by the Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE, KERALA VERSUS BINANI ZINC LTD. 2009 (10) TMI 133 - SUPREME COURT . It is found that the lower authority have relied upon the minority view to confirm the demand which is against the settled principle of the law that majority decision is a binding precedents. The Tribunal in the case of COMET BRASS INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, DAMAN 2005 (6) TMI 355 - CESTAT, MUMBAI while referring to the judgment of the Wyeth Laboratories Ltd has held that the entire purpose of setting down the disputed issue is defeated of majority decisions are not followed by the field formations and further the Tribunal set aside the order which was based on the minority view expressed in the Larger Bench s decision in the case of Wyeth Laboratories Ltd. In these appeals also the impugned orders are based upon minority view in the case of Wyeth Laboratories Ltd to confirm the demand which is not sustainable in law - the impugned order is not sustainable in law - appeal allowed.
Issues involved:
The issues involved in this case are related to duty penalty and interest confirmed by the Commissioner in three appeals against the impugned orders, focusing on the non-payment of duty on the removal of Brass Scrap to a job worker during the relevant period. Summary of Judgment: Issue 1: Duty on Brass Scrap Removal The appellant, engaged in manufacturing final products, sent Brass Scrap to a job worker for conversion into brass wires without paying duty, leading to objections raised by the audit. The show cause notices alleged contravention of Excise Rules due to non-payment of duty on the Brass Scrap removal. The appellant refuted the allegations, citing compliance with procedures and proper intimation to the authorities. Issue 2: Legal Arguments The appellant argued that the Brass Scrap sent for conversion is a recyclable material, serving as a semi-processed form of input for manufacturing final products. They relied on the Wyeth Laboratories Ltd. case decision, emphasizing that waste and scrap can be removed without duty payment for job work and used as inputs. The appellant contended that the impugned order wrongly classified Brass Scrap as a final product, contrary to Cenvat Credit Rules. Issue 3: Precedents and Decisions The appellant cited various tribunal and court decisions, including Wyeth Laboratories Ltd., Binani Zinc Ltd., and Jain Metal Components Pvt. Ltd., where similar issues were decided in favor of the assessee. They highlighted the consistent application of the Wyeth Laboratories Ltd. decision in subsequent cases, emphasizing the legality of not paying duty on waste removal for job work. Judgment and Decision After considering submissions from both parties and reviewing relevant precedents, the Tribunal found that the issue was settled by the Wyeth Laboratories Ltd. decision, restricting waste to inputs not intended for further use in final product manufacture. The Tribunal noted that the majority decision should prevail, and reliance on the minority view was not sustainable. Therefore, the impugned order was set aside, allowing the appeals of the appellant with consequential relief, if any, as per law. This judgment emphasizes the correct interpretation of rules regarding duty payment on waste removal for job work, aligning with established legal precedents and upholding the principle of majority decisions in legal matters.
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