2017 (11) TMI 760

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.... scrutiny of their records, it was noticed that the appellant during the period May 2007 to March 2011 cleared about iron waste & scrap valued at Rs. without payment of duty of Rs. 31,19,475/-. 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. Aggrieved by the said order, the present appeal is filed before this forum. 3. The principal contention of the Ld. Advocate for the appellant is that the recovery proceeding initiated against the appellant ma....

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....so 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 specific provision inserted w.e.f 16.06.2005 as Rule 3(5A) in CCR, 2004, waste and scrap of capital goods are liable to duty on the transaction value of such waste and scrap. In the present case, the appellant had failed to discharge duty on the transaction value of the waste and scrap as per the said....

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....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 capital goods on which CENVAT credit has been availed, if cleared from the factory then the manufacturer shall pay an amount equal to the duty leviable on the transaction value of the waste and scrap. The said rule would come into play only when the capital goods credit had been availed by the assessee and later waste and scrap arose out of the said capital goods. Even though the Appellant had submitted that the capital goods which becam....