2016 (1) TMI 157

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....en submission on 22.7.2015 requesting to consider the same while deciding the appeal. 3. We have taken on records the said written submissions and considered the same. 4. Learned AR submits that the issues involved in this case are: - (i) The respondents were receiving rejected articles of rubber back from their customer and availing CENVAT Credit on the same in terms of provisions of Rules, 2001, more specifically rule 16 and where the processing could not be done on the finished goods, they scraped the articles by cutting them into two pieces and cleared such pieces as scrap on payment of Central Excise duty on the scrap value but are not reversing the amount of CENVAT Credit taken on the goods returned back. (ii) ....

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.... liability on non-inclusion of amortization cost is to be confirmed with interest and penalty is to be imposed and the goods manufactured out of such mould needs to be confiscated. 5. The written submissions filed by the respondent indicate that when they received the goods returned by the purchaser, they tried to process the same and sent it back. During the process, some of the finished goods are self-destroyed which are cleared as scrap and such scrap arose during the course of manufacture. It is submission that 99% of time the finished goods are reprocessed and 1% of the time, the process undertaken resulted in scrap. He would submit that the judgment of the Tribunal in the case of Sundaram Inds. Ltd. Vs. Commissioner of Central Exci....

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....p. The assessee has discharged the duty liability on scrap on the value of the invoices raised by them. In our considered view, this is a correct position of the law and if any inputs are issued to the job-worker for manufacturing and manufacturing activity undertaken on such inputs, the resultant product cleared as scrap and no input as such. Applying the same analogy, we hold that the first appellate authority was correct in setting aside the order of the adjudicating authority, which confirmed the demands raised on this count. 6.2 As regards the demand of duty on the value of moulds used by the respondent in manufacturing the final products to their customers, it is emphasized that they have discharged the Central Excise duty on the c....