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of <h1>Appeals Dismissed: No Duty Payable on Waste and Scrap of Packing Materials, CENVAT Credit Non-Reversal Confirmed.</h1> The appeals challenging the Commissioner's decision to drop proceedings against the Respondent-Assessee for non-reversal of CENVAT Credit on exempted ... Non-reversal of credits availed in respect of exempted services - waste and scrap of packing materials viz. corrugated boxes, cartoons, MS scrap, plastic, industrial refuse etc. - Rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT:- No demand is raised on the Appellant in the Show-cause notices on the ground that it was engaged in trading which was treated as an exempted service against which it cannot avail credits on inputs but the demand was solely based on the ground that out of two varieties of manufacturing waste, one is exempted from payment of Excise Duty for which demand is raised against non-reversal of the allegedly inadmissible credit availed on those exempted products and it is a settled principle of Law, which has been affirmed by the Hon'ble Supreme Court through various decisions including that of MARUTI SUZUKI INDIA LTD. VERSUS COMMISSIONER OF C. EX., DELHI-III [2015 (12) TMI 1598 - CESTAT CHANDIGARH], that duty is not payable on waste and scrap of packing material of inputs and demand is not sustainable if it had travelled beyond the Show-cause notice or made contrary to it, as has been held in the COMMISSIONER OF CENTRAL EXCISE VERSUS GAS AUTHORITY OF INDIA LTD. [2007 (11) TMI 276 - SUPREME COURT]. The order passed by the Commissioner of Central Excise, Customs & Service Tax, Aurangabad are thereby conformed - Appeal dismissed. Issues Involved: Dropping of proceeding by the Commissioner of Central Excise against the Respondent-Assessee demanding Central Excise duty for non-reversal of credits availed in respect of exempted services, interest, and penalty.Summary:The appeal challenges the dropping of proceedings by the Commissioner of Central Excise against the Respondent-Assessee for demanding Central Excise duty related to non-reversal of credits for exempted services. The Respondent, engaged in manufacturing excisable goods, faced a demand for Central Excise duty due to the disposal of waste generated during manufacturing processes. The Appellant argued that the Respondent failed to follow Rule 6(3) of CENVAT Credit Rules, 2004, leading to a show-cause notice for Service Tax and reversal of CENVAT Credit. The Commissioner's order dropping the proceedings was challenged in this appeal along with cross-objections filed by the Respondent.The Appellant contended that the Respondent should have proportionately reversed CENVAT Credit on exempted waste but failed to do so. The Appellant relied on previous judgments to support the duty demand against exempted services. In response, the Respondent's Counsel argued that the show-cause notice did not allege the trading of exempted goods and that the Department cannot introduce new issues beyond the notice's scope. The Counsel distinguished previous judgments cited by the Appellant and emphasized that duty is not payable on waste and scrap of packing materials of inputs.Upon reviewing the case record and relevant judgments, it was concluded that the demand was solely based on the non-reversal of credits for exempted products, rather than on engaging in trading as an exempted service. Following established legal principles and precedents, the appeals were dismissed, confirming the Commissioner's order. The decision was pronounced in open court on 18.03.2024.
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