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<h1>Court rules wastes and scrap not covered under Rule 4(6) of Cenvat Credit Rules, 2004</h1> The court ruled in favor of the appellant, holding that Rule 4(6) of the Cenvat Credit Rules, 2004 did not cover the clearance of wastes and scrap. As ... Penalty - Cenvat/Modvat Issues involved: Interpretation of Rule 4(6) of the Cenvat Credit Rules, 2004 regarding clearance of wastes and scrap and imposition of penalty.Interpretation of Rule 4(6):The appellant argued that Rule 4(6) of the Cenvat Credit Rules only pertained to permission for clearing inputs, partially processed inputs, and finished goods on payment of duty, but did not mention clearance of wastes and scrap. Citing a precedent case, it was contended that the Rules did not have a specific provision for the return of wastes/scrap and that wastes and scraps should not be considered as finished goods. The appellant's advocate highlighted that since Rule 4(6) did not apply to the clearance of wastes and scrap, the penalty imposed by the lower appellate authority was unjustified.Supporting Arguments:The advocate for the appellant referenced a Tribunal decision in Forbes Aquatech Ltd. v. Commr. of Central Excise, Calicut, which emphasized the absence of specific provisions in the Rules regarding the clearance of wastes and scrap. It was further argued that previous legal decisions had established that wastes and scraps should not be categorized as finished goods, reinforcing the position that Rule 4(6) did not encompass clearance of wastes and scrap.Decision and Ruling:Upon hearing arguments from both sides and examining the case records, the judge found merit in the appellant's submissions. It was noted that Rule 4(6) of the Cenvat Credit Rules, 2004 did not address the clearance of wastes and scrap or the requirement for obtaining permission for such clearance. Consequently, the imposition of a penalty by the lower appellate authority for a violation of Rule 4(6) was deemed unjustified. As a result, the penalty was set aside, and the appeal was allowed.(Dictated and pronounced in the open court)
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