2024 (4) TMI 902 - AT - Central Excise

Fire brick waste from kiln operations not liable for duty under Rule 3(5A) CENVAT Credit Rules 2004

Orient Glaze Pvt Limited Versus Commissioner of Central Excise & ST, Anand

Orient Glaze Pvt Limited Versus Commissioner of Central Excise & ST, Anand - TMI Issues involved:The issue involved in the present case is whether the appellant is liable to pay duty on waste and scrap of fire brick after use in the kiln during the period 2010-11 (upto February 2015) u/s Rule 3 (5A) of Cenvat Credit Rules, 2004.Summary of Judgment:Issue 1: Liability to pay duty on waste and scrap of fire brick under Rule 3 (5A) of Cenvat Credit Rules, 2004The appellant argued that the waste and scrap of fire brick, after being used in the kiln and no longer usable even as scrap, does not require duty payment as per Rule 3 (5A). They relied on a judgment related to a similar provision in Central Excise Rules, 1944. The respondent reiterated the findings of the impugned order confirming the duty demand. The Tribunal analyzed the relevant rules and previous decisions, including the case of Birla Corporation Limited, where it was held that waste and scrap of capital goods, such as fire bricks, sold as scrap are not liable to duty. The Tribunal found the facts of the present case to be similar to the Birla Corporation case and ruled that the duty on waste and scrap is not payable. Therefore, the impugned order was set aside, and the appeal was allowed.This judgment clarifies the interpretation and application of Rule 3 (5A) of Cenvat Credit Rules, 2004 concerning the liability to pay duty on waste and scrap of fire brick after use in the kiln. The Tribunal's decision was based on the principle established in a previous case regarding similar provisions in Central Excise Rules, 1944, emphasizing that waste and scrap of capital goods sold as scrap are not subject to duty payment.