AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 12
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....ture of exempted goods. Rs.4,73,544 3 Incorrect reversal of cenvat credit attributable to exempted goods, by considering the weight of the final product and not considering the quantum of inputs used in the manufacturing activity. Rs.1,20,52,945 4 Incorrect reversal of credit for LPG / Furnace oil used in the manufacture of exempted goods, by incorrect adoption for value of exempted goods. Rs.26,84,779 5 Non reversal of input services credit for exempted goods manufactured - Sep 2005 to March 2008 Rs.5,38,281 6 Non reversal of input services credit for exempted goods manufactured - April 2008 to March 2010 Rs.4,61,569 7 Availment of credit on input services exclusively used in the manufacture of exempted goods Rs.2,71,005 8 Availment of credit on capital goods used exclusively in the manufacture of exempted goods. Rs.18,53,440 2. In all, the impugned order confirmed total demand of Rs. 2,32,51,011/- along with interest thereon and also imposed equal penalty under Rule 15(2) read with Section 11AC of the Central Excise Act, 1944. Hence this appeal. 3. When the matter came up for hearing ld. counsel Shri M. Karthikeyan, made oral and written submissions which can....
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....case subsequently as reported in 2015 TIOL 1248 CESTAT Del. In view of the above, the demand confirmed in this regard is not sustainable on merits as well as on limitation. 3.4 With regard to demand of Rs. 26,84,779/- at Sl. No. 4, relating to alleged incorrect reversal of credit for LPG / furnace oil, ld. counsel submitted that the above exempted products has either been manufactured by them on their own or on job work basis for Vikram Sarabhai Space Center (VSSC) and Mishra Dhatu Nigam (MIDHANI). In the impugned proceedings it has been alleged that as per Explanation 1 to Rule 6(3A), which is inserted with effect from 1.4.2008, value of the exempted goods have to be determined in terms of Section 4 or 4A of Central Excise Act, 1944, which has not been followed. 3.5 It was further submitted that appellant has reversed the credit taken on LPG/Consumables used for such exempted goods manufactured on job work basis by taking into account the job charges received as the value of exempted products. However, in the impugned proceedings, it has been alleged that the value of FOC materials supplied for job work have not been taken into account. Similarly, in the impugned proceedings it ....
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....tus supported the impugned order. In respect of the ld. counsel's reliance in the case of Albert David Ltd. (supra), he submits that the ratio thereof cannot be made applicable to the present appeal for the reason that in Albert David Ltd., the issue related to credit on inputs contained in scrap generated during manufacture of exempted goods. The Court observed that since duty is paid on plastic waste, CENVAT credit on the inputs of plastic granules proportionate to waste and scrap is eligible. The said ratio would not be applicable to the present appeal since the waste material is resulting out of process of steel ingots. Further, in a number of other judgments, the Hon'ble Supreme Court has held that waste and scrap is not a manufactured product and therefore cannot be excisable. 4.1 With respect to the allegation concerning failure to include amortized cost of the funded facility provided free of cost by VSSC, ld. AR pointed out that the appellant is contending that the quantum of amortization should be less by adopting wrong calculation and excluding the value of free clearances from both numerator and denominator. Further, the procedure of arriving at the value for applying ....
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....ed the waste / scrap arising out of the manufacture by payment of duty, that is, they have paid duty of Rs. 25,48,822/- on the scrap arising out of manufacture of exempted products. That therefore the remaining inputs is contained in the waste / scrap and they are eligible for the credit of inputs contained in the waste and scrap and are not required to reverse the balance credit. From records it is seen that the appellants have adjusted the duty paid on scrap being Rs. 25,45,822/- and calculated the balance to be Rs. 95,07,123/- and have paid this amount. They have contended that since the inputs are contained in the waste and scrap and when such scrap is cleared on payment of duty, they are eligible for the credit of inputs contained in scrap generated during manufacture of exempted goods. The appellant has relied on the ratio laid down in the case of Albert David (supra). In the said case, the Tribunal had held that CENVAT credit is not available in the inputs contained in scrap though the scrap is cleared on payment of duty. The said decision was reversed by the Hon'ble High Court of Allahabad and it was held that appellant is eligible for the credit of the inputs (plastic scra....
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....t that while reversing the credit relating to inputs used for exempted goods, they have arrived at the value of clearance of exempted goods by taking into consideration the job charges only and not including the material cost. The value of exempted goods has to be arrived by including both material cost as well as job charges. Further, for the finished products manufactured on their own account for VSSC and cleared under exemption, the appellants have not included the amortized cost of plant and machinery funded by VSSC. The demand has been raised by the department by including the cost of raw material supplied free by the customers of VSSC and MIDHANI and also the amortized cost of the plant and machinery which was funded by VSSC. It is seen from the records that the appellant furnished Chartered Accountant's certificate as to the funded facility of machineries. Based on the above certificate and other documents, the amortized cost and the material cost has been arrived by the department and the demand for the period September 2005 to March 2008 has been arrived to be Rs. 10,33,314/- and the demand for April 2008 to March 2010 has been arrived as Rs. 16,51,465/-. It is seen from t....