2017 (1) TMI 1233

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....e manufacture of axel assemblies and components meant for motor vehicles falling under Chapter 87 of First Schedule of Central Excise Tariff Act (CETA), 1985. On gathering intelligence that the assessee was not discharging the Central Excise duty in respect of scrap generated, the officer of the department visited the manufacturing premises and found that the assessee sends inputs on which CENVAT credit has been availed to the job worker to carry out necessary conversion and receive back only the processed components. The scrap generated during the job work is not received back by them but is retained and sold by the job workers without payment of excise duty on such scrap. This lapse was detected by the department and it was found that the....

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....r is not sustainable in law as the learned Commissioner (A) has not appreciated the facts in a proper perspective. He further submitted that the case laws which have been relied upon by the Commissioner (A) for granting relief to the assessee are not applicable in the facts of the present case. He further submitted that as per Rule 4(5)(a) of the CENVAT Credit Rules (CCR), and the Notification of the department mandates that the goods have to be returned back to the manufacturer, which does not mean only the processed goods but it includes by-products, scrap or waste generated during the course of job work as per Rule 2(h) of CCR and as per 3.2 of Chapter 5 of CBEC's Excise Manual of Supplementary Instructions, as waste and scrap are fi....

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....Excise Rules, 1944 and the present Rule 4(5)(a) of CCR, 2004, it is very clear that in the erstwhile Rule 57F(2), the raw material suppliers was required to either get back the scrap generated/produced at the job worker's end or was required to pay duty on such scrap, whereas under the present Rule 4(5)(a) of CCR, the Legislature in its wisdom has specifically omitted the words "either to get back the scrap generated / produced at the job worker's end or to pay duty on the same". He further submitted that this very issue is no more res integra and has been settled in favour of the assessee by various decisions of the Tribunal and he relied upon following decisions: i. CCE vs. Rocket Engineering Corporation: 2008 (223) ELT 347 (Bo....