Excise Duty on sale of scrap

[Shyambihari Sharma]

Dear Sir,

We have paid Service Tax on transportation for Coal. Coal is one of our Inputs for manuafcturing of Final Product (e.i. Sponge Iron). We have taken CENVAT Credit of the Service Tax. Now the coal is crushed for the manufacturing of fnal product. During the crushing of coal some fines generated , which was unusable and scraped for us and sold without charging any excise duty. Is any excise duty applicable on sale of this scraped sales.

We need your proper guidlines in this respect.

Thanking You,

Shyam Bihari Sharma

User ID : ashirwadjsr

Mobile no. 9334021015

AI Summary

Excise duty on waste coal not payable when scrap is not a manufactured good; CENVAT reversal may be necessary.
Waste coal fines produced during crushing of coal used as an input are not excisable manufactured goods, so excise duty is not payable on their sale; CENVAT credit on transport services used to bring the coal generally need not be reversed because the waste arose from necessary manufacturing processes, although an alternative practice advises debiting a portion of scrap sale value to CENVAT where the sale is treated as an exempted output.