2017 (12) TMI 617

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....t appeared that appellant had removed a quantity of 22,790 MT of waste and scrap which had arisen during the course of manufacture of finished goods to one Kanishk Steel Industries without payment of excise duty. Department took the view that such waste and scrap that have arisen during the course of manufacture are excisable and dutiable. Proceedings were initiated against appellant which resulted in issue of three adjudication orders, inter alia demanding duty liability with interest thereon and also imposing equal penalty of under Section 11AC of the Act. On appeal, Commissioner (Appeals) upheld the adjudication orders as detailed below : S. No. Appeal No. Order-in Original OIA No. Duty (Rs.) Penalty(Rs.) 1. E/469....

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....such clearances to a job worker are not be considered or taken into account. (v) Thus, the value of waste and scrap removed to a job worker need not be added to the overall aggregate value of clearances. (vi) In this view of the matter, the appellant takes support of the following decisions : (1) Shree Mahavir Industries Vs CCE, Rajkot - 2004 (166) E.L.T. 503 (Tri. Mumbai) (2) Shakti Wire Products Vs. CCE, Mumbai - 2009 (241) E.L.T. 223 (Tri. Mumbai) (vii) As there is no duty liability, on such clearances the interest and penalty imposed ought not to be levied. 3. On the other hand, Ld. A.R. Shri K.P. Muralidharan supports the impugned order. 4.1 Heard both sides and have gone through the f....

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....ed in this light, the waste and scrap could at best be considered as captively consumed goods, the value of which is definitely not required to be excluded under the SSI exemption notification. This is evident from para-3 (b) of the SSI notification which reads as follows : "3. For the purposes of determining the aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely :- (a) .... ..... .... (b) clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods: (c) .... ..... .... Therefore, when the goods recycled captively, the value will not form....