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TMI Blog2017 (7) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CCR, 2004 are not applicable to the facts of the case - said issue is covered by the circular B-4/7/2000-TRU dated 03.04.2000 and various decisions namely in the case of Mahindra Hinoday Industries Ltd. [2015 (1) TMI 26 - CESTAT MUMBAI], where it was held that the appellant is entitled for Cenvat credit on inputs which contained in waste and scrap generated at the end of job worker - the waste and scrap generated at the end of the job worker, who had cleared the said waste and scrap on payment of duty. The appellant cannot be denied cenvat credit, therefore, we hold that the cenvat credit on ₹ 67,16,069/- cannot be denied to the appellant. Appeal allowed - decided in favor of appellant. - E/1253/2010 - IO/E/12/2017-EX[DB] - Dated:- 6-6-2017 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Ms. Krati Somani, Advocate- for the appellant Sh. G.M. Sharma, AR- for the respondent ORDER Per: Ashok Jindal The appellant is in appeal against the impugned order denying the cenvat credit on inputs on account of certain inputs were rejected/ spoiled by the job worker and certain inputs were not received back by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been sent in process of manufacturing of final product, therefore, the cenvat credit cannot be denied in the light of the decision of the Hon'ble Delhi High Court in the case of Asahi India Safety Glass Limited Vs. Union of India 2005 (180) ELT 5 (Del.) which have been followed by this Tribunal in the case of Ericsson India Pvt. Ltd. Vs. CCE 2016 (334) ELT 107 (Tri. Del.), Therefore it is prayed that impugned order be set aside. 5. On the other hand, the Ld. AR opposed the contention of the Ld. Counsel and submits that as per Rule 4(6) of the Cenvat Credit Rules, 2004, the appellant has not taken any permission as per Rule 4(6) of the Rules, therefore, the appellant is not entitled to take cenvat credit on the part of inputs which gone into waste and scrap generated at the end of the job worker. He further submits that as the appellant has shown very high wastage on rejects, therefore, they are not entitled to take cenvat credit thereon. 6. Heard the parties and considered the submissions. 7. On hearing the rival two issues arises from the facts of the case: (1) Whether the cenvat credit of ₹ 6,00,613/- cannot be denied to the appellant on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,613/- cannot be denied to the appellant on inputs rejects/spoiled and which were received by the appellant. Issue No. 2: Cenvat credit of ₹ 67,16,069/- denied on inputs on account of generation of waste/scrap generated at the job worker's end . 9. We find that in this case there is no allegation against the appellant in the show cause notice that the appellant has not complied with the contention of Rule 4(6) of the CCR, 2004, therefore, the same is not relevant for us to decide the issue. Further, we find that the CBEC Circular F.NO. B-4/7/2000-TRU dated 03.04.2000 which clearly stated as under: 5. Some doubts have been raised whether CENVAT credit would be admissible on the part of input that is contained in any waste, refuse or by-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 by-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 use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the amended Rule 4(5)(a) applicable to the period in question as reproduced above refers only to return of the final product within 180 days and it does not have any specific provision with regard to return of waste/scrap. Return of final product is not disputed. The board has clarified in para 5 of their letter dated 03.04.2000 extracted supra that cenvat credit cannot be denied on the waste/refuse or by-product. This issue has been clarified in the case of CCE Vs. Shakumbari Sugar Allied Industries ltd. , in para 4 which is extracted supra. In terms of this case, the assessee is eligible to avail cenvat credit on the waste produced in the manufacture of final product. Therefore, the order against the appellant Forbes Aquatech is not legal and proper. The same is set aside by allowing the appeal. Further in the case of Mukand Ltd. (Supra) has observed as under: 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vendor who supplied the raw material. The appellant could not place any evidence that such rejected raw material was cleared by them on payment of duty. The appellant referred to the cross examination of the cost accountant as evidence of payment of duty on the scrap. In this context, the reply to the question during the cross examination is limited to the documents shown to him at that time and cannot be taken as documentary evidence showing payment of duty. The proper document for payment of duty is TR-6 challan or debit particulars from the Cenvat credit account. In absence of same, they were required to reverse the credit. 18. I agree with the findings of the Commissioner in para 19 of the Order-in-Original in which she has considered the facts and circumstances of the case and distinguished the judgement of Asahi India Safety glass Limited (supra). In the other case relied by the appellants of Ericsson India Pvt. Ltd. (supra), the inputs were imported which were found to be defective and question was whether Rule 3(5) of Cenvat Credit Rules, 2004 could be invoked on subsequent re-export of the said defective goods. The facts being different, the case law is not ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final reply was submitted by the assessee. Therefore, the assessee was again requested by the Assistant Commissioner, Central Excise Division-II, Faridabad vide letter C.No.CE-20/Audit/Escorts/R-XXIII/23/2006/124 dated 15.7.2008 to submit complete reply with proper documents within seven days. In reply to this office letter dated 15.7.2008, the assessee vide their letter dated 14.8.2008 intimated that they have referred the matter to their legal consultant who is preparing suitable reply in consultation with their staff. But no reply was submitted by the assessee. As per the provisions contained in sub-section (5) of section 14AA of the Central Excise Act, 1944, the assessee was given an opportunity of being heard in respect of material gathered on the basis of the audit under sub-section (1) and proposed to be utilized against them in the proceedings under the Central Excise Act. But the assessee failed to submit their final reply on the special audit report even after expiry of two years from the date of supply of copy of special audit report to them. The department followed the principle of natural justice but the assessee did not co-operate with the department by not submitting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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