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<h1>Tribunal rules no duty on waste/scrap of capital goods cleared without payment, in line with Cenvat Credit Rules.</h1> The Tribunal upheld the impugned Order-in-appeal, dismissing the Revenue's appeals. It was determined that wear and tear/waste and scrap of capital goods ... Manufacture - Excisability Issues involved: Validity of the impugned Order-in-appeal, duty liability on wear and tear/waste and scrap of capital goods, refund of duty already paid on waste and scrap.Validity of the impugned Order-in-appeal: The Revenue challenged the validity of the Order-in-appeal passed by the Commissioner (Appeals) in multiple appeals.Duty liability on wear and tear/waste and scrap of capital goods: The issue revolved around the duty liability of the respondents on wear and tear/waste and scrap of capital goods cleared without payment of duty. The Revenue argued that such items are dutiable under specific tariff headings and duty should have been paid at the time of clearance.Refund of duty on waste and scrap: In one appeal, the issue related to the refund of duty already paid by the respondents on the waste and scrap of capital goods.The learned SDR contended that wear and tear/waste and scrap of capital goods are dutiable under specific tariff headings and should have attracted duty at the time of clearance. The SDR argued that these items are chargeable to duty as they are considered manufactured products.On the other hand, the Counsels for the respondents argued that no duty could be claimed on wear and tear/waste and scrap as they did not arise during the manufacturing process. They referred to the Cenvat Credit Rules, 2001, stating that duty reversal or payment is only required when inputs/capital goods are removed by the assessee.After hearing both sides and reviewing the records, it was found that the scrap cleared was not considered manufactured goods and did not fall under the ambit of duty liability. The Tribunal referenced previous judgments to support this stance, emphasizing that no duty can be demanded on waste and scrap generated during the use of capital goods.In conclusion, the impugned Order-in-appeal was upheld, and the appeals of the Revenue were dismissed based on the lack of duty liability on wear and tear/waste and scrap of capital goods.
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