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TMI Blog2010 (5) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. - E/1535/2005 - 356/2010-EX(PB) - Dated:- 14-5-2010 - Justice R.M.S. Khandeparkar, President and Shri Rakesh Kumar, Member (T) REPRESENTED BY: Shri Z.U. Alvi, Advocate, for the Appellant. Shri Sunil Kumar, DR, for the Respondent. [Order per Rakesh Kumar, Member (T)].- The Appellants manufacture Cotton Yarn and Blended Yarn chargeable to Central Excise Duty under Chapter 52 and 55 of Central Excise Tariff Act. They also avail Cenvat credit of duty paid on input/capital goods used in or in relation to the manufacture of finished products. The Appellants, among other items, had taken Cenvat credit of duty paid on furnace oil and lubricant oil in terms of Rule 3 of Cenvat Credit Rules, 2002. The lubricant oil after being use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed on the Appellant under Rule 25(1) of Central Excise Rules, 2002 on the ground that since Cenvat credit of duty paid on lubricants had been availed, in respect of clearance of waste oil. Provision of Rule 3(4) of Cenvat Credit Rules, 2002 would become applicable and an amount equal to the duty payable on the waste oil would be required to be paid, but the same was not paid. On appeal to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal No. 615/CE/BPL/2004 dt. 20-8-04 upheld the Dy. Commissioner's order observing that when input duty Cenvat credit has been taken in respect of lubricants, at the time of removal of the waste oil an amount equal to the duty chargeable on the same would be required to be paid as per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be attracted and an amount equal to duty chargeable on the goods would be payable and that in view of this, the demand has been rightly upheld by the Commissioner (Appeals). 3. We have carefully considered the submissions from both the sides and perused the records. The period of dispute in this case is from 2-2-02 to 31-3- 03. During the period till 28-2-03 as per the provisions of sub-rule 4 of Rule 3 of Cenvat Credit Rules, 2002 when inputs or capital goods, on which Cenvat credit has been taken, are removed as such, from the factory, the manufacturer of final products was required to pay an amount equal to the duty chargeable on such inputs at the rate of duty on the date of removal and on the value determined as per the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land Ltd. reported in 2003 (151) E.L.T. 438. 3.1 We also find that while the show cause notices had been issued on the basis that waste oil, which is used and burnt lubricant drained out from the machines after use, is chargeable to duty under sub-heading 2710.90 of the tariff and in the show cause notices, Rule 3(4) of Cenvat Credit Rules, 2002 had not been invoked, the adjudicating authority, while adjudicating these show cause notices has travelled beyond the SCNs and has confirmed the duty demand on waste oil by invoking Rule 3(4) of Cenvat Credit Rules, which is not permissible. However, as discussed above, the duty demand on waste oil is neither sustain able on the ground mentioned in the SCNs nor under Rule 3(4) of the Cenvat Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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