TaxTMI 
TaxTMI 
1995 (9) TMI 126
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....ets falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985. The main raw material is C.R. Coils on which they were availing MODVAT Credit under Rule 57A of the Central Excise Rules, 1944. They had received C.R. Coils and examined it. Some of the Coils which were found to be deformed/deshaped/defective on account of transportation and handling then those were returned to the supplier. Those which were found defective after a few process of cleaning by water, passing of hot air and by acid, then those were removed and sold by the appellants as `waste and scrap' at the rate of Rs. 1000/- PMT. The departments case is that this `waste and scrap' had not been generated during the course of manufacture of final product, an....
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....stated that this process is a continuous process. In between these two processes i.e., after degreasing, rust removing and, galvanising, if the defective materials are found, the same are removed as "waste and scrap" and sold to separate parties under invoices. They are all resellers of C.R. Coils and not remelters. In view of these circumstances, the department issued show cause notice alleging that the goods which has been found to be not fit for galvanisation cannot be treated as `waste and scrap' but they are original C.R. Coils which are sold at higher prices then `waste & scrap'. therefore, the MODVAT Credit is required to be reversed at the rate, at which they had taken credit originally. The appellants resisted the demands and had u....
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....on are considered as goods as if manufactured in the factory. While in the present case, the C.R. Coils are used in galvanising and during the course of galvanisation, certain defective portion arise and such ones cannot be considered as inputs removed as such. Accordingly, he submitted that the provisions of Rule 57F(1)(ii) are not applicable to the present case, as the defective portions cannot be considered as if manufactured in the appellant's factory. He also submitted that defect noticed in the C.R. Coils during the manufacture are waste and scrap and hence no duty is liable to be paid since the defective portions cannot be considered as goods manufactured in terms of Section 2(f). 4. The Learned DR supporting the view taken b....
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....p-merchants had segregated the scrap and replinesed sheets. These sheets, were sold to small scale industries and others, for manufacturing goods. The assessee was also recovering cut material, before such waste and scrap was dumped in the scrap yield. The department had raised similar allegation as herein. The assessee had resisted the department's allegation. However, the Tribunal negatived their plea by majority order. The finding given by the third member in para 50, 51 and majority order in 52 is reproduced herein below : * * * * * * * 6. The Learned DR submitted that this judgment fully covered on the present case. We agree with the submission of the Learned DR that the appellants herein are placed in a worse position inasm....