9911796707
TMI Blog2023 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... as endorsed the findings given by Hon ble Andra pradesh High Court in case of above mentioned party s case in COMMISSIONER OF C. EX., HYDERABAD-I VERSUS AUROBINDO PHARMA LTD. [ 2010 (10) TMI 175 - ANDHRA PRADESH HIGH COURT] where it was held that the department accepted the assessee s contention that at the relevant period the spent solvent is not a marketable product after process of manufacture. Thus, the waste solvents is not dutiable and therefore the demand of Central Excise duty amounting to Rs. 2,02,242/- is not sustainable. Dutiability of the waste scrap cleared by the appellant - HELD THAT:- The department has not produced any evidence to contradict the submissions which have been made by the appellants that the waste and scrap which have been cleared without payment of duty has arisen from the materials on which CENVAT Credit has not been availed by the appellant - Similarly for the waste of drums and packaging material which have been cleared without payment of duty. It is found that matter is no longer res integra as Hon ble Supreme Court in case of COMMISSIONER OF CENTRAL EXCISE VERSUS WEST COAST INDUSTRIAL GASES LTD. [ 2003 (4) TMI 110 - SUPREME COURT] has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 2008 to September 2010 (c) Interest amounting to Rs.29,886/- and Rs.3,59,016/- on the above duty amounts at (a) and (b) respectively (d) Penalty under Section 11AC of Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002. (e) Confiscation of and redemption fine in lieu of confiscation on DMF solvent weighing 4,35,575 Kg seized from the factory during panchnama on 20.10.2010 under Rule 25 of Central Excise Rules, 2002. (f) Confiscation of and redemption fine in lieu of confiscation on goods already cleared from the factory allegedly without payment of appropriate excise duty as mentioned in clause (a) and (b) above. 1.1 The matter has been adjudicated vide order dated 2 August 2011, wherein all the charges as mentioned above confirmed by the Adjudicating Authority. The appellants appealed against the order-in-original before Commissioner (Appeals), and the appellant did not succeed at the Commissioner (Appeals) level also and therefore they are before us against the impugned order in appeal dated 27 November, 2012. With regard to the issue of excisability of the spent solvent it has been submitted by the learned Advocate appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the purchase. These parts and components after certain period of use get worn out and had to be replaced and therefore the worn out parts and components are scrapped time to time and same are cleared without payment of duty as at the time of the purchase of the same no CENVAT Credit has been availed on the same and same not being the manufactured goods of the appellant and therefore no duty can be levied on the same. It has further been emphasised by learned Advocate that the provisions of Rule 3 (5A) of the CENVAT Credit Rules, 2004 can only be invoked in case of removal of items on which CENVAT Credit was availed at the time of purchase. Learned Advocate for emphasising his point of view has relied upon decision of CESTAT Mumbai in the case of M/s. Padmashri Dr. Vitthalrao Vikhe Patil SSK Vs. CCE, Aurangabad as reported at 2017 (349) ELT 650, wherein this Tribunal has held that waste and scrap of generated during maintenance of machinery is not excisable, more so when CENVAT Credit has not been availed on the items out of which the same had arisen. The learned Advocate has also relied upon various other decisions of this Tribunal as well as orders of various High Courts, som ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty of Rs. 2,02,242/- on spent solvent (DMF) arising during course of manufacturing of dutiable Sucralose is sustainable or not? (ii) Whether credit of Rs. 13,84,146/- need to be reversed as per the provisions of Rule 3 (5A) of the CENVAT Credit Rules, 2004 on clearance of waste and scrap arising out of items on which CENVAT Credit was not availed at the time or purchase and on items which were packing material of inputs which were used in the manufacture of dutiable goods? 3.2 We find that so far as the dutiability of the spent solvent is concerned same has already been decided by Hon ble Apex Court in decision of CCE Hydrabad Vs. Aurobindo Pharma Ltd reported at 2011 (269) ELT A147 (SC), the Hon ble Supreme Court s decisions has endorsed the findings given by Hon ble Andra pradesh High Court in case of above mentioned party s case. The relevant extract of the same is reproduced below: 7. Two issues arise for consideration. First, whether the department, having accepted the principle in the earlier case, can be permitted to take contra stand in subsequent cases. Secondly, whether the resultant spent solvent in the manufacturing activity of APL is liable to duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the point involved in the present case is identical to the point involved in Hindustan Petroleum Ltd., (supra) and the department having accepted the principle laid down in Hindustan Petroleum Corporation Ltd., (supra), the department cannot be permitted to take a different stand in the present appeals. 9. Yet again, in Novapan Industries Ltd., following Birla Corporation Ltd., v. CCE and Jayaswals Neco Ltd., v. CCE, Nagpur the Supreme Court reiterated the law that, the department having accepted the principles laid down in the earlier case cannot be permitted to take a contra stand in subsequent cases . 10. In CCE, Hyderabad v. Aurobindo Pharma Ltd. the learned Tribunal considered the question, whether spent solvent (spent methanol, in that case) is liable to duty. It was held as follows. On a careful consideration, we notice from the extracted order of the Commissioner v. Herren Drugs Pharmaceutical Ltd., Order-in-Appeal No. 99/2005, dated 28-6-2005, that the Commissioner has examined the issue in depth and in detail. It has been clearly brought out that the spent solvents had already been utilized in the factory and latter it had undergone further purific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned orders that the solvents are repeatedly used after purification within the factory premises and they get mixed up with various impurities and at a stage when they cannot be reused, they are cleared by the assessee for a consideration. In short, clearances of the mixed solvent, which is done from the factory premises, is the residue, which gets retained after the manufacturing of final products by repeated use of the solvents during the course of manufacturing of final products. The appellant s claim that these goods are not excisable is supported by the judgment of the Tribunal in the case of CCE, Hyderabad v. Aurobindo Pharma Ltd. reported in 2010 (249) E.L.T. 415 (wherein I authored the judgment). The relevant paragraphs in the said judgment of Aurobindo Pharma Ltd. need to be reproduced:- 3.2 The assessees are engaged in the manufacture of Bulk Drugs and Bulk Drugs Intermediates. They use solvents such as Methanol, Toluene etc., in the manufacture of the said products and availing Modvat credit on the above said inputs/solvents. In the manufacturing process of the said finished goods, solvents such as Methanol, Toluene etc., are recovered and the same are re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot invoke the provisions of Section 2(d) of the Central Excise Act, 1944. All the show cause notices are alleging that the process that is carried out for the purification of the mixed solvents amounts to manufacture as per the provisions of Section 2(f) of the Central Excise Act, 1944. Since the said proposition is already decided by the Tribunal in the case of Aurobindo Pharma Ltd. and followed in the case of Lee Pharma Pvt Ltd. (supra), the question of demanding any duty from the appellant on this invocation of the provisions of Section 2(f) does not arise. 10. Be that as it may, the Apex Court was considering the provisions of Section 2(d) of the Central Excise Act read with Section 2(f) of the Central Excise Act in the case of DSCL Sugar Ltd. (supra). The ratio of the said judgment would apply in the case in hand squarely. We respectfully reproduce the relevant paragraphs:- 5. However, show cause notices were issued to the respondents herein stating that Bagasse would be subject to duty under the Central Excise Act, 1944, as other products . These show cause notices were issued to the respondents in terms of the provision contained in Rule 6(3) of the Cenvat Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it or adoption of any other treatment on the goods to render the product marketable to the consumer; and the word manufacture shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production of manufacture on his own account; 9. The Revenue sought to cover the case under subclause (ii) as per which the process which is satisfied in relation to any goods in the Section or Chapter notes of the First Schedule to the Central Excise Tariff Act, 1985 would amount to manufacture . Here again, fiction is created by including those goods as amounting to manufacture in respect of which process is specified in the Section or Chapter notes of the First Schedule. It can be seen from the above reproduced ratio that the Revenue has sought to invoke the same provisions of Section 2(d) to fasten the liability on the appellant, even by applying the provisions of Section 2(d) of the Central Excise Act, 1944. In our view, the impugned orders are unsustainable as per the authoritative judicial pronouncements as reproduced herein above. 11. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contradict the submissions which have been made by the appellants that the waste and scrap which have been cleared without payment of duty has arisen from the materials on which CENVAT Credit has not been availed by the appellant. We find force in the submissions made by the appellant, as the assertion made by them had not been contradicted by the department by adducing any evidences in this regard. While holding this view we also take shelter of this Tribunal s decision M/s. Padmashri Dr. Vitthalrao Vikhe Patil SSK Vs. CCE, Aurangabad reported at 2017(349) ELT 650 (Tri.- Mum): 5. The demand was confirmed on the waste and scrap of paper and steel. The show cause notice has not indicated that why this duty is being levied on waste and scrap. As per the facts submitted by the appellant the paper waste is import of waste paper and the same was cleared as such. As regard the steel scrap, it is scrap generated from the maintenance of plant and machinery. On the both items appellant has not availed Cenvat credit. The Excise duty can be charged on the waste and scrap only (i) where waste and scrap is generated during the course of manufacture of excisable goods; and (ii) such waste ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
