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of <h1>Tribunal allows Modvat/Cenvat credit on waste & scrap in manufacturing process</h1> <h3>COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I Versus SPECIAL ENGG. SERVICE LTD.</h3> COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I Versus SPECIAL ENGG. SERVICE LTD. - 2009 (235) E.L.T. 859 (Tri. - Del.) Issues:Whether Modvat/Cenvat credit facility can be availed on waste and scrap generated during the manufacture of job work materials cleared without payment of duty.Analysis:The issue in this case revolves around the eligibility of the Respondents to avail Modvat/Cenvat credit facility on waste and scrap generated during the manufacturing process of job work materials, specifically Bearing Races/Components cleared without duty payment under Notification No. 214/86-C.E. The Respondents argued that previous Tribunal decisions support their claim, citing cases like CCE v. Allwyn Auto Ltd. and Sterlite Industries Ltd. v. CCE, Pune. They emphasized that waste and scrap, being excisable goods, should not be denied credit when generated during the manufacturing process of job work materials. The Tribunal found merit in the Respondents' arguments and rejected the appeals of the Revenue. The decision was based on the understanding that waste and scrap generated during the production of excisable goods should not be excluded from credit utilization, especially when the final product is cleared with duty payment by the principal manufacturer.In conclusion, the Tribunal's judgment upheld the Respondents' right to avail Modvat/Cenvat credit on waste and scrap generated during the manufacturing process of job work materials cleared without payment of duty. The decision was supported by previous Tribunal rulings and the understanding that waste and scrap, being excisable goods, should not be denied credit when utilized in the production process. The rejection of the Revenue's appeals was based on the principle that credit utilization on waste and scrap should not be restricted, especially when the final product is cleared with duty payment by the principal manufacturer.
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