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TMI Blog2016 (12) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... harge Central Excise duty on the finished goods processed as job worker under Rule-4 (5) (a) of the Cenvat Credit Rules 2004. Whether standard input-output norms have been rightly made applicable by the department for calculating the yield of Alloy Lead ingots manufactured by the appellant out of the raw materials supplied by EIL under job work challans? - Held that: - input output norms of 1 kg of lead for every 1.07 kg of waste & scrap can not be made applicable to all categories of waste & scrap and can be made applicable only to standards waste & scrap where metal content in the waste and scrap is 97% or more. If the department was not agreeable to the % recovery prescribed by M/s EIL then the only way to reject that could have been to have sample yield studies done by the investigation to determine recovery yield percentages. There is no evidence that any lead ingots have been cleared clandestinely except presumptions surmises & theoretical calculations based on standard Input-output norms which does not apply to the waste & scrap received by the appellant from M/s. EIL. There is no justification either for demanding duty or for imposition of penalties against the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon in the following case laws:- (i) Hindustan Cables Ltd. Vs CCE Raipur [2001 (138) ELT 384 (Tri.-Kolkata)] (ii) Binani Zinc Ltd. Vs CCE Cochin [2002 (05) LCX 0249] (iii) Shakti Wires Products Vs CCE Mumbai-V [2009 (03) LCX 0135] (iv) CCE Belapur Vs Plastika Industries [2015 (12) LCX 0110) [2016 (335) ELT 574 (Tri.-Mumbai)] 2.2. Learned Consultant further argued that Adjudicating authority has taken ratio of 1kg lead alloy for every 1.07 kgs of lead scrap used, as per stander input output norms, when calculating the yield of the finished Alloy Lead ingots when the materials received by the appellant are not standared waste / scrap and yield is much less as per purchase orders of EIL. That only due to erroneous ratio of input-output taken by investigation excess production has been calculated when nothing has been clandestinely cleared as no such seizure of alleged clandestine removal has been made by the investigation. Input Output Norms under C1195 read with ISRI scrap Specification ratio of 1: 1.07 kg will be applicable to highly refined scrap of Radio, Rakes Relay type of stander scraps not to the inferior scraps received by the appellant RFP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble final product. Merely because the waste and scrap so generated has been made dutiable when sold, it cannot be said that new excisable product has been manufactured. They do not come out as a new excisable product but the same only emerges out of the manufacturing process. As the clearance is made for the specific purpose i.e. for conversion, and not being a sale, they are eligible for the provision of Rule 4(5)(a) of Cenvat Credit Rules, 2004. 9. Five Member Bench of the Tribunal in the case of Wyeth Laboratories Ltd. v. Collector of Central Excise, Bombay - 2000 (120) E.L.T. 218 (Tri-LB) has decided the issue of clearance of scrap for job work. In the said case, it has been held as under :- Word waste in Rule 57F(4) to be restricted to such converted inputs which are not desired to be used any further for use, in or in relation to the manufacture of the final product - Option to exercise the routes available between Rules 57F(2) (now Rule 4(5)(a)) and 57F(4) procedures remains with the manufacturer and is not lost by a change in form of the input, due to processing. Modvat - Removal of inputs - Rule 57F(4) of Central Excise Rules, 1944 cannot be read to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer for converting the same into granules and receiving the same back for further use in the manufacture of finished goods. Both the lower authorities have come to this conclusion after considering all the records of the case before them. 7. Revenue s claim that benefit of Notification No. 214/86-C.E. cannot be made applicable to waste is incorrect as the said notification applies for the goods manufactured by a jobworker on jobwork basis and to be used in or in relation to the manufacture of final products on which duty of excise is leviable whether in whole or in part. In the case in hand, it is undisputed that the plastic waste and scrap which gets generated during the manufacture of final products are sent to jobworker and received back as granules which are further consumed in the manufacture of final products. On the face of such factual matrix, in our view, both the lower authorities were correct in holding that no liability arise on the respondent-assessee. 7. In view of the above settled legal propositions no duty liability is attracted when goods are processed by the appellant under Rule-4(5) (a) of Cenvat Credit Rules 2004. Annexure-II challans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered cable, and foreign material. 8.1. From the above standard literature input-output norms will be applicable when lead ingots are made from highly refined waste scrap of lead which is free from drosses,, collapsible tubes, other metals, etc where lead metal content could be 97% or more. On the contrary appellant RFPL is getting following categories of waste scrap with the yield expected by M/s EIL:- Waste Scrap Category Recovery Sump Paste 69% Lead Dust 79% Scrap Oxide 83% Anti Alloy Dross 74% Cal Alloy Dross 78% Mix Scrap Lead Dross 78% Anti Scrap Plate 84% 9. In view of the above observations we are of the considered opinion that input output norms of 1 kg of lead for every 1.07 kg of waste scrap can not be made applicable to all categories of waste scrap and can be made applicable only to standards waste scrap where metal c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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