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TMI Blog2013 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Gupta,JJ. For the Appellant : Amit Jaitely, Bharat Ji Agarwal, Piyush Agarwal For the Respondent : S. S. C. ,Ramesh Chandra Shukla ORDER (Delivered by Prakash Krishna, J.) The aforesaid appeals have been filed under section 35G of the Central Excise Act. The Central Excise Appeal No.36 of 2005 has been filed against the order dated 28th of December, 2004 passed by the Customs, Excise and Service Tax Appellate Tribunal in Excise Appeal No.E/2497-98/2002/NB(A) and Excise Appeal No. E/656/ 2003/NB(A). While Central Excise Appeal No.58 of 2000 has been filed against the order dated 22nd of February, 2005 passed by the Appellate Tribunal in Excise Appeal No.E/764/04-NB(B). The learned counsel for the parties jointly stated at the bar that identical questions of fact and law are involved in these appeals. The arguments were advanced with reference to the Central Excise Appeal No.36 of 2005. The facts are taken from the record of the said appeal. M/s. Albert David Ltd., the appellant, is engaged in manufacture of goods including intravenous fluids (IV Fluids) falling under the Chapter 30 of the Central Excise Tariff Act, 1985. During the course of manufacture ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise duty has been demanded by the department and paid by the appellant under Central Excise and Tariff Entry No.39.15, hence the appellant was entitled for the Cenvat Credit under Rule 57AA?" (2) Whether in view of the Circular issued by the Central Board of Excise Customs dated 29th August, 2000 clarifying that Cenvat can be utilized for payment of duty on waste and scrap since they are final products within the definition of the word final products under Rule 57 AA (c) of the Rules, hence the Tribunal was not justified in denying the benefit of Cenvat Credit duty paid on in puts used in the manufacture of final products namely, the plastic scrap?" Heard Sri Bharat Ji Agrawal, learned senior counsel along with Sri Piyush Agrawal and Sri Aditya Bhattacharya for the appellant and Sri R.C. Shukla, learned counsel for the respondent department. Learned senior counsel for the appellants submitted that the appellants are producing exempted goods as held by the Tribunal as well as dutiable goods in the shape of waste and scrap. The submission is that waste and scrap are finished on which duty is payable. Reference was made to Entry No.39.15 of the first schedule of the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranules contained in the scrap. The appellants are not eligible to avail the CENVAT Credit of the duty paid on plastic granules, which are contained in the scrap. The plastic granules, admittedly, had been brought into the factory for manufacture of IV Fluids, which have been held to exempted by us in the present order. Once the inputs are used in or in relation to the manufacture of products, which are exempted from payment of duty, CENVAT Credit will not be available to the appellants. It is not the case of the appellants that they are bringing out inputs for the manufacture of scrap. The scrap arises as a result of process of manufacture undertaken by them on the inputs for getting the finished products. Therefore, the demand of duty, equivalent to the CENVAT Credit taken on inputs contained in the scrap, is up-held." On difference of opinion the following question was framed and referred to third member (Vice President) for opinion:- DIFFERENCE OF OPINION Whether CENVAT credit of the duty paid on input (plastic granules) contained in the plastic scrap which was generated in the process of manufacture of IV Fluids and cleared by M/s. Albert David Ltd. (appellant) without p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducts whether directly or indirectly and whether contained in the final product or not, and includes accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production, and also includes lubricating oils, greases, cutting oils and coolants. Explanation.-The high speed diesel oil or motor spirit, commonly known as petrol, shall not be treated as an input for any purpose whatsoever. Rule 57-AB is relevant for claiming Cenvat Credit. It provides that a manufacturer or producer of final product shall be allowed to take credit of the duty of excise specified in the first schedule to the Central Excise Tariff Act. For the sake of convenience, the said Rule is reproduced below:- RULE 57 AB. CENVAT credit. - (1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of,- (i) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the said Firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the department that the waste of plastic is liable to duty at 16 per cent under tariff Entry no.39.15 of the first schedule of the Central Excise Tariff Act. The appellant submitted that on clearance of waste and scrap of plastic, duty @ 16 per cent has been paid under the aforesaid tariff heading no.39.15. Our attention was also drawn to a circular issued by the Government of India, Ministry of Finance (Department of Revenue) dated 29th of August, 2000, its clause-6 in particular which reads as follows:- 6. Some references have been received seeking clarification whether CENVAT credit can be utilized for payment of duty on waste and scrap. The answer to this query lies in the affirmative for the simple reason that waste and scrap are "final products" within the definition under Rule 57 AA (c). The above circular issued by the department supports the contention of the appellant and the said circular is relevant being contemporaneous exposition by competent authority. Although reference was made to certain decisions of the Apex Court holding that such circulars issued by the department which are against the department and favours the assessee/manufacturer is binding on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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