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TMI Blog2010 (8) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... d out of dismantling of machinery are due to wear and tare of machine parts cannot be treated as excisable goods leviable to duty as waste and scrap as defined in note 8(A) of Section 15 of CETA 1985 - Tribunal had taken a view that scrap which is generated from capital goods is not covered by this definition - waste and scrap are not covered by the definition and in any case department has not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty has been imposed. The waste and scrap cleared by the appellant unit during the period were of capital goods and duty demand has been made as per Sub Rule (5A) of Rule 3 of Cenvat Credit Rules, 2004. 2. Learned advocate submitted that the waste and scrap consisted of several items such as brass scrap, used SS spindle, used filter for lube oil/change oil, MS/SS/Brass scrap etc. He submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rule 3(5A) of Cenvat Credit Rules provide that if capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value". Therefore it becomes necessary to classify the goods. The next submission by the learned advocate was that the demand is for an amount equivalent to duty leviable as per the provision of Rule 3(5A) of Cenvat Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon classification of the goods and rate of duty as per tariff. In such a situation it cannot be said that Section 11A would not be applicable. The next contention submitted by the appellant was that waste and scrap of metal generated out of dismantling of machinery are due to wear and tare of machine parts cannot be treated as excisable goods leviable to duty as waste and scrap as defined in note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above decision. In view of the fact that this waste and scrap are not covered by the definition and in any case department has not made any effort to classify the same, it has to be held that appellants have made out a very strong case in their favour. Further it was also submitted that substantial portion of the capital goods which have been sold as waste and scrap, were the ones on which cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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