2017 (3) TMI 1124 - AT - Central Excise

Judicial orders reversed on duty credits for waste and scrap appeal

The Member (Judicial) modified the orders to direct the reversal of specific credits made by the appellant regarding duty on waste and scrap. The ... Waste and scrap - clearance of waste and scrap without payment of duty/reversal of credit - demand - Held that: - relating to the demand on waste and scrap of packing material is concerned, reliance is placed in the case of COMMISSIONER OF CENTRAL EXCISE Versus WEST COAST INDUSTRIAL GASES LTD. [2003 (4) TMI 110 - SUPREME COURT OF INDIA] wherein it has been pointed out that there is no specific provision under the Rules considering such barrels/drums as a waste arising out of manufacturing process The appellant had already reversed the credit of ₹ 52,736/- on MS Scrap and willing to reverse credit of ₹ 7,206/- on the MS Turning Scrap & Waste Cuttings as they could not able to trace the origin of the said scrap. On the demand relating to waste and scrap of capital goods, the chartered accountant’s certificate is laud and clear as most of these items were procured before 01.04.1994, and no contrary evidnce is produced by the Revenue. Therefore, waste and scrap of the capital goods cannot be subjected to duty. The demand on the scrap of motor cycle cannot be sustained as no credit is availed on the same. Appeal disposed off - decided partly in favor of assessee. Issues:Appeal against orders passed by Commissioner (Appeals) regarding demand notices for recovery of duty on waste and scrap without payment of duty/reversal of credit.Analysis:1. Facts of the Case:The appeals were filed against orders passed by the Commissioner (Appeals) regarding the clearance of waste and scrap without payment of duty/reversal of credit during specific periods. Demand notices were issued for recovery of duty and imposition of penalties, which were confirmed on adjudication.2. Contentions of the Parties:The Revenue contended that the orders passed by the Commissioner (Appeals) lacked detailed findings and were therefore bad in law. The Chartered Accountant for the respondent argued that certain amounts related to clearance of specific materials covered by relevant legal precedents and notifications. They also highlighted that no duty was required to be paid on certain items based on clear evidence provided.3. Judgment:After hearing both sides and examining the records, the Member (Judicial) found the explanation provided by the Chartered Accountant for the respondent to be convincing. The judgment referred to the decision of the Hon’ble Supreme Court in a relevant case supporting the respondent's contentions. It was noted that the appellant had already reversed certain credits and was willing to reverse more based on inability to trace origins. The certificate provided by the Chartered Accountants regarding the capital goods scrap was found to be clear and convincing, leading to the conclusion that no duty was required to be paid on such scrap.4. Outcome:The judgment modified the impugned orders to the extent of directing the reversal of specific credits already made and agreed to be made by the appellant. The grounds taken by the Revenue in the appeals were deemed devoid of merit, resulting in the disposal of the Revenue's appeals accordingly.This detailed analysis of the judgment showcases the issues involved, the arguments presented by both parties, the legal reasoning applied by the Member (Judicial), and the final outcome of the case.