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TMI Blog2013 (3) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... on scrap generated during the course of processes are required to be declared under Rule 57G of the Central Excise Rules, 1944 (for short 'the Rules, 1944') but the petitioner has not made such declaration, therefore, the respondent No. 3 has rightly denied MODVAT credit facility to the extent of aforesaid proposed scrap. 2. As per pleadings and documents, the petitioner is engaged in the manufacturing of iron and steel products i.e. ribbed bars and other articles falling under Chapters 72 & 73 of the Central Excise Tariff Act, 1985 (for short 'the Act of 1985'). The petitioner opted to avail facility of MODVAT credit of duty paid on inputs used in or in relation to the manufacture of final products. The petitioner filed declaration i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to the manufacture of final products is an essential requirement under the Rule 57H of the Rules, 1944. Therefore by passing the said orders, the respondent No. 2 or the Collector, Central Excise have not committed any illegality. 4. Heard learned Counsel for the parties and perused the petition, documents and impugned orders. 5. Learned Counsel for the petitioner vehemently argued that iron scrap was not excisable because it has no contribution or effect on the process of manufacturing of final products i.e. ribbed bars. He further submits that while dealing with the aforesaid question in the matter of Grasim Industries Limited v. Union of India - (2011) 10 SCC 653 = 2011 (273) E.L.T. 10 (S.C.) the Supreme Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, it is not possible to accept the appellants' contention that though they have not declared 'scrap' but since they have declared 're-rollable material' in the Rule 57G declaration that should suffice for the purpose of availing modvat credit. The Commissioner is right in denying modvat on this quantity for want of specific inclusion of scrap in this declaration under Rule 57G. Due to this very lapse of non-declaration taking of deemed credit on 195.925 MT of MS Scrap has rightly been disallowed as also the denial of modvat credit on material cleared, without obtaining the required permission under Rule 57F(1)(ii)." 8. In the matter of Grasim Industries (supra) the Supreme Court has held that iron scrap and metal scrap arise in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, unless expressly mentioned in the said Section Note. 14. The goods have to satisfy the test of being produced or manufactured in India. It is settled law that excise duty is a duty levied on manufacture of goods. Unless goods are manufactured in India, they cannot be subjected to payment of excise duty. Simply because a particular item is mentioned in the First Schedule, it cannot become exigible to excise duty. [See Hyderabad Industries Ltd. v. Union of India, Moti Laminates (P) Ltd. v. CCE and CCE v. Wimco Ltd.] Therefore, both on authority and on principle, for being excisable to excise duty, goods must satisfy the test of being produced or manufactured in India. In our opinion, the charging Section 3 of the Act comes into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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