2017 (11) TMI 758

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....e appellants are engaged in the manufacture of Molasses & Special Denatured Spirit falling under Chapter 17 and 22 of the CETA, 1985. During the course of audit, on scrutiny of their records, it was noticed that the appellant during the period 7.2.2006 to 14.4.2009 cleared about iron waste & scrap valued at Rs. 1,02,94,329/- without payment of duty of Rs. 15,69,469/-. Alleging that the said Iron and scrap is generated out of the capital goods installed in the factory, show cause cum demand notice was issued for recovery of the duty along with interest and penalty. On adjudication, the demand was confirmed with interest and penalty of equal amount. On appeal, the Ld. Commissioner (Appeals) upheld the Order but reduced the quantum of demand b....

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....tive Sugar Mills Ltd vs. Commissioner of Central Excise, Panchkula - 2011 (265) ELT 236 (Tri.-Del.). 4. Further, the Ld. Advocate in support of his argument that they have not availed CENVAT credit on the capital goods which were sold as scrap placed a Chartered Accountants Certificate. He has also contended that no fact was ever suppressed from the knowledge of the department, the clearances of scrap during the aforesaid period had been duly reflected in their books of accounts and the waste and scrap had been cleared against commercial invoices and both the authorities below had failed to appreciate their argument that the demand is thus barred by limitation. 5. Per contra, the Ld. AR for the Revenue submitted that in view of the sp....

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....heet cannot support their claim that the demand is barred by limitation. 6. Heard both sides and perused the records. The short question for determination is: whether clearance of Iron waste and scrap after 16.06.2005 alleged to be generated out of capital goods on which CENVAT Credit availed, be subjected to duty on its transaction value or otherwise. Before considering the rival contentions, it is necessary to refer to Rule 3(5A) of CCR, 2004, inserted w.e.f. 16.06.2005 which reads as follows:- "3(5A) If the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value." 7. A plain reading of the said provision makes it clear that waste and scrap of capita....