Removal of waste and scrap arising out of the inputs on which Modvat credit has been taken - Instructions regarding - Central Excise - 2/93-CX.8

Removal of waste and scrap arising out of the inputs on which Modvat credit has been taken - Instructions regarding Circular No. 2/93-CX.8 Dated 12-1-1993 [From F.No. 261/76/2/88-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Removal of waste and scrap arising out of the inputs on which Modvat credit has been taken - Instructions regarding. I am directed to invite your attention to the Board's instructions contained in Cir. No. l5/89-CX.8, dated 19-4-1989 (F.No. 261/76/2/88-CX.8) and in Cir. No. 267/48/90-CX.8, dated 21-6-1990 vide which the Board had decided to permit movement of aluminium and zinc scrap generated out of the inputs on which Modvat credit has been taken, outside the factory under Rule 57F(2) for conversion into ingots and returns thereof, for subsequent manufacture. The issue has been re-examined by the Board in the light of the recommendations made by the 3rd North Zone Tariff Conference and in the light of CEGAT judgment in CCE, Hyderabad v. Nucon Industries Pvt. Ltd. - l991 (37) ECR 47 (Cegat-SRB). It is seen that Rule 57F(2) provides for removal of only inputs 'as such' or after these have been 'partially processed' during the course of manufacture of final products to a place outside the factory for specified purpose like test, repairs, refining, reconditioning or carrying out any other operations necessary for the manufacture of final products or for manufacture and return of the intermediate products to the factory for further use in the manufacture of final product. Rule 57F (2) does not cover removal of waste or scrap outside the factory. Such removal of waste and/or scrap is instead governed by the provisions of Rule 57F(4) . It has, therefore, been decided to withdraw the aforesaid instructions of the Board and to clarify that removal of waste and/or scrap of any kind outside the factory should be allowed only under the provisions of Rule 57F(4). Any permission granted to any assessee to remove waste or scrap under Rule 57F(2) may please be withdrawn. Trade and field formations may be informed, accordingly. Receipt of this Circular may please be acknowledged.