AI Drafter 
TaxTMI 
TaxTMI 
2016 (12) TMI 1114
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....heir own raw materials RFPL is also making such lead ingots of various grades from waste & scrap, dross, sump paste, lead sludge, lead dust, scrap oxide received from M/s Exide Industries Ltd. (EIL) under Rule- 4(5) (a) of the Cenvat Credit Rules 2004. That the said raw materials are received by RFPL under Job work challans & are sent back to the principle after doing the processes as job worker. Learned consultant made the bench go through some of these challans. That Sh. Biswajit Bose of M/s EIL has deposed in his statement dt 3/7/12, recorded during investigation, that EIL are sending raw materials on regular basis to the appellant under Rule 4 (5) (a) of the Cenvat Credit Rules 2004, That as per the purchase orders the recovery percent of lead ingots varies depending upon the nature of raw material supplied by EIL. Learned consultant made the bench go through terms & condition of one such purchase order at Page - 264 of the appeal memorandum. 2.1. It is the case of the RFPL that once inputs are received under Rule 4 (5) (a) of Cenvat Credit Rules 2004 then Job worker is not required to pay any duty. Learned consultant relied upon larger bench case law of M/s Wyeth Laboratori....
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....ombay [2000 (120) ELT 218 (Tribunal LB)] with respect to Rule 57 F (2) & F (4) of the Central Excise Rules 1944. Relying upon this five member larger bench decision CESTAT Mumbai in the case of Shakti Wire Products Vs CCE Mumbai-V (Supra) held as follows:- 7. We have examined the position. It has been alleged in the show cause notice that since the scrap is a finished goods, it is not permitted to be cleared in terms of Rule 4(5)(a) to a job worker. However, it is seen that the scrap so sent to the job worker is returned back to the Appellants in the form of ingots, which is then further processed in the Appellants' unit to manufacture flats, strips, rods, which are cleared on payment of duty. Thus there is absolutely no loss of any revenue to the Government. 8. The waste and scrap generated are the remnants emerging as a necessary consequence of the manufacturing activity of cold rolling and cold drawing of copper bar undertaken by the appellants for bringing out the final product. These waste and scrap generated during the process of manufacture instead of being disposed of in the market, is being recycled and re-converted into copper bars, by following the procedure of Rul....
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....verting into ingots, under Rule 4(5)(a). The demand of duty can only be confirmed, if there is diversion of generated scrap for any other purpose other than reconversion. It is not in dispute that in the present case, the scrap cleared by the appellants under job work challan has been returned in the form of ingots and properly accounted for." 6. In the case of CCE Belapur Vs Plastika Industries (Supra) CESTAT held that no duty liability is attracted, when plastic waste & scrap in processed under Notification No. 214/86-CE, as discussed in Para- 5, 6&7 reproduced below:- "5. On perusal of the records we find that the issue involved is regarding demand of duty on the respondent for clearance of waste and scrap during the period 1998-99 to 1999-2000 on the ground that the duty liability needs to be discharged on such clearance while it is the case of the assessee-respondent that they had cleared the waste and scrap under the provisions of Notification No. 214/86-C.E. and received back the granules which are used for manufacturing process. 6. At the outset we find that both the lower authorities have given concurrent findings as to the demand being unsustainable. Both the low....
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.... Lead Scrap Namely ISRI Radio Racks, Relay, Ropes & Roses. 1.06 Kg Content Export Product The input-output norms for expected yield of lead is with respect to standard lead scraps like ISRI Radio, Rakes, and Relay etc. Scrap Specifications Circular 2013 by Institute of Scrap Recycling Industries (ISRI) has described scraps like Radio, Rakes & Relay as follows:- "-Radio MIXED HARD/SOFT SCRAP LEAD Shall consist of clean lead solids, free of other materials, such as drosses, battery plates, lead covered cable, collapsible tubes, type metals, aluminum, zinc, iron and brass fittings, dirty chemical lead and radio- active materials. Review packaging specifications and regulatory status pertaining to shipping with buyer prior to sale. -Rakes BATTERY LUGS To be free of scrap lead, wheel weights, battery plates, rubber and/or plastic case material and other foreign material. A minimum of 97% metallic content is required. Review packaging specifications and regulatory status pertaining to shipping with buyer prior to sale. -Relay LEAD COVERED COPPER CABLE Free of armored covered cable, and foreign material." 8.1. From the above standard literature input-output norm....