2013 (11) TMI 1215

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.... job worker under Rule 4(5)(a) of the CENVAT Credit Rules, 2004 for drawing the same into insulated copper wire. During the wire winding, certain waste and scrap, to the extent of 2% is generated at the job worker's end on which Department intends to deny the CENVAT Credit. 2. Shri Dhaval Shah, (Adv.) appearing on behalf of the appellant argued that Rule 4(5)(a) of CENVAT Credit Rules, 2004 does not envisage bringing back of any waste and scrap if generated as held by CESTAT Ahmedabad in the case of FAG Engineering (I) Ltd. Vs. CCE Vadodara [2011 (266) ELT 193 (Tri-Ahmd)]. He further relied upon the judgment of Mumbai Bench in the case of Mahindra Hinoday Industries Ltd. Vs. CCE Pune-I [2011-TIOL-1537-CESTAT-MUM] wherein it is held that ....

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....sioner has prescribed the manner in which the duty liability has to be discharged vide Trade Notice 38/02 wherein he has fastened the duty liability on the principal manufacturer rather than on the job worker. The waste and scrap is generated during the course of the job work and it is the job worker who is the manufacturer of waste and scrap under the Central Excise Rules, 2002 and the liability to pay duty is on the person who produces or manufacturer any excisable goods in terms of Rule 4 of the said rules and duty liability has to be discharged in the manner provided for in rule 8 of the said rules. The liability to pay excise duty and the manner of payment of duty are governed by Rules 4 and 8 of the Central Excise Rules. They are not,....

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.... waste and scrap. In case, the department wanted to recover duty on the waste and scrap, then the demand should have been raised on the job workers as has been held in Alucast Foundries (supra). 5. Further, in the case of the appellant decided by CESTAT Ahmedabad on 23.01.2013 [2013-TIOL-629-CESTAT-AHM] following has been held:            10. I find that both the lower authorities have not accepted this fact and held that the provisions of Rule of 4(5)(a) of CENVAT Credit Rules envisages the receipt of entire goods back from the job workers. In my view, the said findings are not in consonance with the law as has been laid down by the Tribunal in the case of Bharat Radiators Ltd (supra)....