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TMI Blog2018 (5) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of duty which is higher than the one he claimed as CENVAT credit. It is also a fact that the appellant has paid higher duty as scrap than he claimed as CENVAT credit. Further, the entire transaction, in the present case, is revenue neutral as the duty has been paid on removal of scrap on which the credit was availed. In the case of PSL Holdings Ltd. vs. CCE [2003 (7) TMI 117 - CESTAT, MUMBAI], it was held by the Tribunal that utilisation of credit for payment of duty which was not required to be paid, credit was effectively reversed and the Revenue cannot once again ask for reversal of credit - In the present case also, the appellant has availed CENVAT credit on scrap received from the job workers based on the duty paid document an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with interest and penalty 2. E/191/2009 Order-in-Original No.140/2008-Commr. LTU dated 20.12.2008 April 2007 to January 2008 Rs.43,48,995/- along with interest 3. E/26972/2013 Order-in-Appeal No.85 86/2013 dated 22.3.2013 Feb. to Mar. 2008 Rs.13,86,414/- along with interest interest Penalty 4. E/26973/2013 2. For the sake of convenience, the facts of appeal No.E/849/2009 are taken. 3. Briefly the facts of the present case are that the appellants are engaged in the manufacture of altern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e process, the original authority observed in the order that the job workers have sent these scraps to the appellant by raising the invoices and on payment of duty, the scrap was duly accounted for in the Daily Stock Register. In spite of this observation, the original authority came to the conclusion that scrap is not an input for the manufacture of final product and no manufacturing process was carried out on the scrap received by the appellant and therefore, the CENVAT credit taken on the scrap is not permissible to the appellant and confirmed the demand along with interest and penalty of ₹ 10,000/- under Rule 15(1) of CENVAT Credit Rules. Aggrieved by the said order, appellant filed appeal before the Commissioner (A), who rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture is nothing but reversal of credit availed and further demand is not sustainable. He also submitted that the credit was validly availed as duty and was being paid on removal of scrap. These scraps were not manufactured within the factory. He also submitted that the iron and steel was an input for the appellant in general and scrap was also iron and steel on which credit was availed as inputs. Since the scrap was removed as such, duty equal to amount of credit availed was paid in accordance with Rule 3(5) of CENVAT Credit Rules, 2004. 5.1 Alternatively, he submitted that Rule 16 permits receipt of duty paid goods within the factory of manufacture for being remade, refined, reconditioned or for any other reason, on which credit can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 6. On the other hand, the learned AR in the assessee s appeals defended the impugned order passed by the Commissioner (A) and Commissioner and in the Department s appeals, he has submitted that the impugned order dated 22.3.2013 vide which the Commissioner (A) has allowed the appeal of the assessee is not sustainable in law. He further submitted that the assessee has not followed the procedure prescribed under Rule 16. Further, he submitted that the assessee has failed to prove that the scrap was used for manufacture of the final product. He also submitted that scrap does not fall in the definition of input service as per Section 2(k) of the Central Excise Act, 1944. 7. After considering the submissions of both the parties and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versal of CENVAT credit on technical ground is not tenable under law. 7.2 Further, I find that in the department s appeals, the Commissioner (A) vide impugned order dated 22.3.2013 where the Commissioner (A) has allowed the appeals of the assessee. The Commissioner (A) in para 11 of impugned order has given the reasoning, which are reproduced herein below: 11. The appellant submits that the company purchases steel and dispatches the same directly to the job workers, job worker takes the credit of the duty paid on the said steel and manufactures stampings for the appellant. Job worker, after the manufacture of such stampings sends it back to the appellant on payment of duty and also sends scrap generated during manufacture of dutiabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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