TaxTMI 
TaxTMI 
2010 (7) TMI 435
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....ated 20-1-2009 by which recovery of Cenvat credit of Rs. 5,35,897 along with interest and imposition of penalty of Rs. 10,000 was upheld. 1.3 Both these appeals involve identical issues and, therefore, are being disposed of by this common order. 2. Heard both sides. 3. The relevant facts in brief are as follows :- The appellant is a manufacturer of medicines falling under Chapter 30 of the CTA, 1985. Some of the medicines manufactured by them are fully exempted under Notification No. 6/2002-CE, dated 1-3-2002. The appellants are using plastic granules for the manufacture of bottles/containers used for packing of both dutiable and exempted medicines. It is claimed, during the course of hearing, that the manufacturing process is a....
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....Show-cause notices were issued alleging that the credit taken on the waste and scrap of plastic arising out of manufacture of exempted medicines is in contravention of rule 6(1) of the Cenvat Credit Rules, 2004. In pursuance to the show-cause notices, the original authority confirmed demands of duty holding that the appellants were not eligible for the credit taken on granules attributable to waste and scrap of plastic and imposed penalties. Commissioner (Appeals) has upheld the demand and reduced the penalty substantially. 4. Ld. Consultant for the appellants submits that in respect of the process relating to manufacture of dutiable medicines, the final products emerging are the dutiable medicines, and the dutiable waste and scrap of pl....
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.... 238 (Trib. - Bang.) wherein taking note of the Board's Circular dated 29-8-2000, the payment of duty on waste and scrap using Cenvat credit stands upheld. 5. Ld. SDR strongly supports the orders of the Commissioner (Appeals). As regards the process of manufacture of exempted medicines, the appellants have made an artificial distinction that part of the granules used was meant for manufacture of waste and scrap of plastics. The entire granules were used only for manufacture of packing containers/bottles for the exempted medicines and the emergence of waste and scrap of plastics cannot alter the said situation. Therefore, the appellants have been rightly denied the credit apply rule 6(1) of the Cenvat Credit Rules, 2004. He also relies on....
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.... is no dispute that the appellants are taking the Cenvat credit on granules and using the same for paying duty on the medicines as well as on the waste and scrap of plastics. The emergence of waste and scrap is inevitable. They are excisable goods and they pay duty and the liability to duty of such waste and scrap is not in dispute. Therefore, the appellants treating the said waste and scrap of plastic arising in the process of manufacture of exempted medicines as final product and paying duty under Chapter Heading 3915 cannot be faulted. The Circular of the Board dated 29-8-2000, though issued in the context of the then prevailing rules, is valid even now and once duty is payable on waste and scrap, use of the credit for paying the duty ca....