2017 (1) TMI 283

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....ff Act, 1985.  During the course of Audit of records of the appellant for the period 2007-2008 and 2008-2009, the Central Excise officers observed that miscellaneous income towards sale of waste and scrap had been shown in the balance sheet for the respective years.  Since the appellant avails cenvat credit on inputs and capital goods used in or in relation to manufacture of the final product, the department proceeded against the appellant for recovery of the cenvat credit, treating the removal of miscellaneous waste and scrap as cenvatable goods.  The SCN issued by the department was adjudicated vide order dated 12.03.2010, confirming the Central Excise duty demand of Rs. 2,36,693/- along with interest and also equal amount ....

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....hose goods removed as waste and scrap were in fact not used as inputs in the manufacture of final product, thus the same cannot be considered as input for the purpose of taking of cenvat credit.  With regard to generation of scrap on aluminum and steel items, the appellant submits that no cenvat credit has been taken by the appellant on initial procurement of those goods, and as such, reversal of credit is no required. 4.  On the other hand, Sh. M. R. Sharma, the Ld. AR appearing for the revenue reiterates the findings recorded in the impugned order. 5.  I have heard the Ld. Counsel for both the sides and perused the records. 6.  I find that as regards the packing materials removed as waste and scrap by the appe....