TaxTMI 
TaxTMI 
2015 (2) TMI 703
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....the inputs contained in such waste and scraps, which have not been received from job-worker, is required to be reversed or not? 3. The appellant, M/s Mukand Ltd., is engaged in manufacture of excisable goods falling under Chapter 72, 73 and 84 of Central Excise Tariff Act, 1985 and was availing CENVAT Credit on inputs. The appellant was sending semi processed inputs for carrying out the process of drawing, straightening, grinding, pickling, peeling etc. to different job workers (about 15 in numbers). The semi processed inputs after being processed for job-work were returned back to M/s Mukand Ltd. It appeared to Revenue that there were always shortages in quantity of processed inputs received back by Mukand Ltd. The processed inputs were....
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.... duty thereon. It was further contended that as required under Rule 4(5)(a) of Cenvat Credit Rules read with Rule 57AC(v) of Central Excise Rules, 1944, the appellant has received back the processed inputs in its factory, within 180 days or any extended period and hence, there was no violation of the any of the provisions of Act and the Rules, as there is no obligation on the appellant to bring back the waste and scrap. It was further contended that after enactment of new Central Excise Rules w.e.f. 1.4.2000, no such provisions is made requiring principal manufacturer to reverse/pay CENVAT Credit on waste and scrap generated at job-worker's premises. Further, reliance was placed on the Board's Circular No. B-4/7/2000-TRU dated 3.4.2....
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.... observed that in similar facts and circumstances, in the appeal for the earlier period, vide Order-in-Appeal dated 28.2.2011, where the issue was identical, it was held that the appellant was required to reverse the proportionate quantity of CENVAT Credit. Further, in respect of penalty, it was held that there is no element of a fraud, suppression etc. In the facts and circumstances, and it is a case of subsequent notice for the existing dispute and accordingly penalty was reduced to Rs. 50,000/-, 4. Being aggrieved, the appellant have preferred the appeal before this Tribunal on the ground among others that the findings of the Commissioner (Appeals) is erroneous in observing that there is no material change in the provisions with respe....
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....d in any intermediate of the final product even if such intermediate is exempt from payment of duty. The basic idea is that CENVAT credit is admissible so long as the inputs are used in or in relation to the manufacture of final products, and whether directly or indirectly. 6. A specific provision has now been made if the inputs or capital goods are cleared to a job worker. It has been provided that they should be received back within 180 days. If they are not received, the manufacturer shall debit the CENVAT credit attributable to such inputs or capital goods, otherwise it will be an offence. However, the manufacturer shall be entitled to take CENVAT credit as and when the goods sent to the job worker are received back. If part of the g....
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....ure of final product is admissible. In such circumstances, the principal manufacturer is entitled to avail CENVAT Credit on inputs contained in waste and scrap generated at the end of the job worker. Accordingly, the appellant prays for allowing the appeal. 5. The learned AR for Revenue relies on the impugned order and further relies on another SMC decision dated 19.9.2011 in the case of Mahindra Hinoday Industries Ltd. Vs. Commissioner of Central Excise, Pune-I - 2013 (292) ELT 456 (Tri-Mum). In that case the duty liability of the principal manufacturer in terms of Rule 4(6) of Cenvat Credit Rules, 2004 where credit was allowed to the manufacturer on condition that waste and scrap generated at job worker's premises would either be b....