9911796707
TMI Blog2012 (9) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... P.V. Seth, Advocate, for the Appellant. Shri J.S. Negi, SDR, for the Respondent. [Order per : P. Babu, Member (T)]. M/s. Essen Multipack Limited is engaged in the manufacture of multi layer films falling under Chapter 39. They had supplied 1001.424 MT of multi layer films to M/s. Markfed HDPE Sacks Plant out which 131.755 co-axial film was rejected and returned during the period Oct 2001 to Feb 2002. In respect of the said material the appellant availed cenvat credit under the provisions of Rule 16(1) of Central Excise Rules after intimating to the department. Since the said material after converting into granules was not found fit for consumption or marketing, it was sold as waste and scrap, the same were cleared without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department that the said job worker has not carried any activity and has not converted the film into granules form. (c) The Commissioner (Appeals) also erred in not considering the fact of receipt of material and it conversion into granules and clearance thereof was known to the department and therefore the show cause notice was barred by limitation. (d) The Commissioner (Appeals) also erred in ignoring the fact that the Chartered Engineer have certified that the rejected material was in the form of film and was at the time of receipt not as per the requirement of the customer and therefore only the same was rejected and returned. The said film, as such could not have been used for further manufacture of the article and therefore a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which 131.755 Mts. of the said product has been rejected by the customer and returned to the appellant. On these rejected goods, the appellant had taken the cenvat credit of amount equal to the duty paid on these goods. It is also the fact that the appellant had processed the same rejected goods but being plastic items suffered with atmospheric effect and could not get desired result. They had then, taken the opinion of Chartered Engineer who opined that rejected goods are not useful for consumption as such as well as for marketing for any application for plastic material for which it was made, and hence the only way to dispose off such rejected goods was to use it as scrap material. The appellant therefore, got the goods processed into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he argument of the appellant that they were not liable to pay duty on scrap. Reprocessing resulted only in scrap and this cannot be said to be manufacture. This Tribunal also held a similar view in the case of M/s. Cosmos Films Limited v. CCE Vadodara in appeal No. E/1105 of 2009 and allowed the appeal. 5. The Tribunal in the case of CCE, Mumbai v. TATA SSL Limited - 2005 (191) E.L.T. 799 (Tri.-Mum.) held that; what is ultimately cleared from the factory is scrap resulting out of further processing of rejected wire. At the time of clearance of scrap, an assessee is not required to reverse the credit taken when rejected wire is received back into the factory. It is enough, if an assessee pays duty on scrap based on its value. The differ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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