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TMI Blog2015 (2) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. - Appeal No. E/1473/11 - Final Order No. A/1482/2014-WZB/C-IV(SMB) - Dated:- 29-10-2014 - Anil Choudhary,JJ. For the Appellant : Shri P V Patankar, Adv. For the Respondent : Shri Ashutosh Nath, AC (AR) ORDER Per: Anil Choudhary: The present appeal filed by the appellant, M/s Mukand Ltd., arises from Order-in-Appeal No. PKS/80/BEL/2011 dated 26.7.2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-III. 2. The issue involved in this appeal is whether CENVAT Credit attributable to the inputs contained in such waste and scraps, which have not been received from job-worker, is required to be reversed or not? 3. The appellant, M/s Mukand Ltd., is engaged in manufacture of excisable goods fallin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and also penalty was proposed under Rule 15 of Cenvat Credit Rules read with Section 11AC of the Act. 3.1 The appellant contested the show-cause notice by filing reply to the same contending that w.e.f. 1.4.2000, the Modvat scheme was replaced with Cenvat Scheme, in which there is no provision, which states that the waste and scrap generated should be returned to the factory of the manufacturer of final product. In case the said scrap/waste is not returned, which is returnable, then the manufacturer of final product should pay duty thereon. It was further contended that as required under Rule 4(5)(a) of Cenvat Credit Rules read with Rule 57AC(v) of Central Excise Rules, 1944, the appellant has received back the processed inputs in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount equivalent to CENVAT Credit attributable to the inputs and the manufacturer can take CEVNAT Credit again when the inputs or capital goods are received back in the factory. Accordingly, the contention of the appellant was not found tenable and the proposed demand of ₹ 1,67,854/- was confirmed along with interest and also equal amount of penalty was imposed under Rule 15 of Central Excise Rules, 2004. 3.3 Being aggrieved, the appellant preferred an appeal before the Commissioner (Appeals), who vide the impugned order observed that in similar facts and circumstances, in the appeal for the earlier period, vide Order-in-Appeal dated 28.2.2011, where the issue was identical, it was held that the appellant was required to reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r urged that this position has been clarified by the Board vide Circular dated 3.4.2000 (supra), wherein para 5 and 6 of the said Circular read as follows:- 5. Some doubts have been raised whether CENVAT credit would be admissible on the part of the input that is contained in any waste, refuse or bye product. In this context it is clarified that CENVAT credit shall be admissible in respect of the amount of inputs contained in any of the aforesaid waste, refuse or bye product. Similarly, CENVAT should not be denied if the inputs are used in any intermediate of the final product even if such intermediate is exempt from payment of duty. The basic idea is that CENVAT credit is admissible so long as the inputs are used in or in relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahindra Hinoday Industries Ltd. Vs. Commissioner of Central Excise, Pune-I - 2014 (308) ELT 555 (Tri-Mum), wherein this Tribunal relying on the earlier ruling of this Tribunal in the case of Forbes Aquatech Ltd. (supra) and also in view of the clarification by CEB C vide its circular dated 3.4.2000 (supra) held that it is immaterial if the scrap has been generated at the end of job workers, who is availing SSI exemption on the scrap, as the Circular has clarified that inputs contained in waste and scrap generated during course of manufacture of final product is admissible. In such circumstances, the principal manufacturer is entitled to avail CENVAT Credit on inputs contained in waste and scrap generated at the end of the job worker. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the condition prescribed in Rule 4 of Central Excise Rules by the Commissioner, it was held that the assessee as the principal manufacturer is liable to pay the duty on the scrap generated at the job-worker's end not brought back to its premises. 6. Having considered the rival contention, I hold that waste and scrap are not manufactured goods whether they are generated at the premises of the principal manufacturer or at the premises of job-worker and accordingly, the legislature have consciously not made any provisions for reversal of any credit taken on duty paid inputs in case of clearance of waste and scrap and/or, there non-return from the job worker's premises under the Central Excise Rules, 2002 read with Cenvat Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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