2023 (9) TMI 410 - AT - Central Excise

Liability of Excise duty - waste and scrap generated at the facility of the job worker - HELD THAT - The order of the Tribunal in their own appeal M/S. VE COMMERCIAL VEHICLES LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE-I 2023 (3) TMI 1401 - CESTAT MUMBAI pertains to the immediate preceding period where reliance placed in COMMISSIONER OF CGST BHIWANDI VERSUS VE COMMERCIAL VEHICLES LTD 2018 (5) TMI 1050 - CESTAT MUMBAI where it was held that in case of the sister unit of the appellant tribunal held that the appellants were not liable to discharge duty on waste and scrap generated at job worker's end. The order impugned does not survive which is set aside to allow the appeal.

Summary

Issues involved:
The issues involved in the judgment are the recovery of demanded amount by the Commissioner of Central Excise, liability on 'waste and scrap' generated by a job worker, refund claim, interpretation of Cenvat Credit Rules, and imposition of penalty under Central Excise Rules.

Recovery of demanded amount:
The appellant, a manufacturer of 'motor vehicles' and 'parts,' challenged the recovery of Rs. 36,38,930 demanded by the Commissioner of Central Excise despite previous Tribunal orders holding that duty liability did not arise on the 'waste and scrap' generated by a job worker contracted by them.

Liability on 'waste and scrap' generated by job worker:
The appellant claimed a refund of Rs. 20,19,820 erroneously discharged as 'duties of central excise' for 'waste and scrap' generated by their job worker. The dispute arose when the lower authorities wrongfully withheld the refund, but the Tribunal decided in favor of the appellant, settling the issue.

Interpretation of Cenvat Credit Rules:
The appellant argued that the 'job worker' was engaged for processing inputs returned for final processing, and the 'waste and scrap' generated were mistakenly believed to be liable to duty. The Tribunal's decision favored the appellant, emphasizing that no duty liability existed on the waste and scrap generated.

Imposition of penalty under Central Excise Rules:
The appellant not only relied on previous decisions but also on the disposal of their appeal against the order of the Commissioner of Central Excise (Appeals) for a specific period. The Tribunal's order set aside the recovery of demanded amount, allowing the appeal in favor of the appellant.

Conclusion:
The Tribunal's judgment set aside the order impugned before them, ruling in favor of the appellant in the recovery of the demanded amount and confirming that no duty liability existed on the waste and scrap generated by the job worker. The decision was pronounced in the open court on 05/09/2023.