TaxTMI 
TaxTMI 
2019 (7) TMI 780
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....d Three Hundred Forty Seven Only) short paid on "Waste and Scraps" of Capital goods sold/cleared during the period 01.04.2012 to 26.09.2013 by the noticee under the provisions of Section 11 A of Central Excise Duty, 1944. (ii) Recovery of interest as applicable under the provisions of Section 11 AA of Central Excise Act, 1944. (iii) I impose a penalty of Rs. 47,35,674/- under Section 11 AC of Central Excise Act, 1944. 2. The issue involved in the instant appeal is regarding alleged short payment of Central Excise duty under Rule 3 (5A) of Cenvat Credit Rules, 2004 (hereinafter referred to as the Credit Rules) removal of used capital goods as "scrap‟. 3. Brief facts of the case are that the appellant is engaged in the manufacture of cement and clinker, falling under Chapter 25 of the First Schedule to the Central Excise Tariff Act, 1985. During the course of audit of the appellant‟s record it was noticed that they have cleared used capital goods as waste and scrap of payment of excise duty as amount equal to duty leviable on the basis of valuation arrived on " transaction value‟ of such capital goods. The Department entertained a view that t....
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.... under Rule 3(5A) of credit rules as held in the following decisions: • Insurance & Electricals Co. vs CCE, 2008 (229) ELT.148 (Tri.-Del.) • Insurance & Electricals Co. vs. CCE, 2008 (232) ELT 326 (Tri.-Del.) • Century Cement vs. CCE, 2017 (3) TMI 1071-CESTAT NEW DELHI • CCE & ST vs. Ambuja Cement Limited., 2015 (316) ELT 272 (Tri.-Mumbai) • Prism Cement Limited. vs CCE, Final Order No. A/52404/2016-EX(DB) Dated 29.06.2016 In respect of scrap of steel casting and conveyor belt which arose out of the activity of repair and maintenance of the machineries and not any manufacturing activities and hence duty is not payable under Rule 3 (5A) ibid. For this reliance was also placed on the following decisions; • Grasim Industries Limited. vs Union of India, 2011 (273) ELT 10(SC) • Ultratech Cement Ltd. vs CCE, Final Order No. 50015/2018 dated 02.01.2018 • CCE vs. Ultratech Cement Ltd., Final Order No. 52990/2017 dated 20.04.2017 • Grasim Cement vs. CCE, 2015(12) TMI 1556-CESTAT NEW DELHI • Budhewal Co-op. Sugar Mills Pvt. Ltd. vs. CCE, 2013 (289) ELT 392 (Tri....
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....used by the amendment dated 17/03/2012 and hence required to be given effect retrospectively as the amendment was made by way of "substitution‟ and not by " addition‟. Reliance was placed in this regard on the following decisions; • Government of India vs. Indian Tobacco Association, 2005 (187) ELT 162(SC) • WPIL Ltd. vs UP, 2005 (181) ELT 359 (SC) • Adani Power Ltd. vs Union of India, 2015 (330) ELT 883(Guj.) as maintained by the Hon'ble Supreme Court in Union of India vs. Adani Power Ltd. 2016(331) ELT A129(SC) • Union of India vs. Steel Authority of India Ltd., 2013 (297) ELT 166(Chhattisgarh) • Essar Steel India Ltd. vs CCE & ST, 2016 (335) ELT 660(Tri.-Ahmd) (v) That the demand prior to 1/03/2013 is also not sustainable as the provisions of recovery of amount under Rule 3 (5A) of the credit rule in terms of Rule 14 which was inserted only with effect from 01/03/2013, and therefore, the Department could not have raised the demand for period prior to 1/03/2013 which is supported by the following case laws; • Eternit Everest Ltd. vs. Union of India, 1997 (89) ELT 28 (Mad.) as mainta....
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....ed the previous position as prevalent under Rule of 1994, and erstwhile Credit Rules. As per Revenue the Notification dated 27/09/2003 has not been given retrospective effect and is thus required to be applied prospectively. We are not in agreement with the interpretation adopted by the learned DR that is contained in the impugned order but more persuaded by the arguments of the learned Advocate wherein he has taken us to the history of levy of duty in terms of Rule 3(5A) of credit rules. This is described as under; Period Relevant Provisions 20.05.1994 to 28.02.1997 The second proviso to Rule 57S of the 1944 Rules 01.03.1997 to 31.03.2000 Rule 57S(2) (c) of the 1944 Rules. 01.04.2000 to 09.09.2004 The erstwhile Credit Rules did not contain any provision dealing with payment of amount when used capital goods are removed as waste and scrap 10.09.2004 to 15.05.2005 Until 15.05.2005, even the credit Rules, 2004 did not contain any provisions dealing with payment of amount when used capital goods are removed as waste and scrap. 16.05.2005 to 16.03.2012 Rule 3(5A) provided for payment of amount equal to the duty leviable on transaction value upon remo....
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.... 09.10.2015 and 20.11.2015. 12. Thus, we are of the considered view that the extended period of limitation for raising the demand is not available with the department. In holding so we are supported by the decision of Hon‟ble High Court in ZYG Pharma Pvt. Ltd. [2017 (258) ELT 101(MP), wherein it is held as under: "5. This Court has carefully gone through the order passed by the . Tribunal and in fact, the Tribunal has upheld the contention of the Department so long as CENVAT credit has been claimed in respect of the impugned goods. The only issue which is bothering the Department is imposition of penalty. 6 The Division Bench of Gujarat High Court in the case of. Commissioner v. Dynamic Industries Ltd., reported in 2014 (307) E.L.T. 15 (Guj.) in paragraph 12 has held as under : Accordingly, the substantial question of law raised in respect of 12. the following three categories of service ie., (i) Customs House Agents Services, (ii) Shipping Agents and Container Services and (iii) Services of Overseas Commission is answered partly in favour of the assessee so far as aforesaid category nos. (i) and (ii) are concerned. Insofar as category No. (iii) ....
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....ty Chemicals Ltd., reported in 2016 (43) S.T.R. 347 (Kar.) in paragraphs 7 and 8 has held as under : 7. It is an admitted fact that the input tax credit was claimed in the return of the assessee from time to time and therefore, it was not a matter for suppression of facts, as sought to be canvassed on behalf of the appellant. 8. Once full facts were disclosed, the normal period of limitation would be one year, whereas the proceedings are initiated after the expiry of a period of one year. Therefore, we do not find that the Tribunal has committed any error in observing that the demand was barred by limitation. 9 In the aforesaid case also, as facts were fully disclosed and there . was no suppression, it was held by the Division Bench that extended period of limitation is not invocable. A similar view has been taken in the following cases : Cosmic Dye Chemicals v CCE reported in 1995 (75) E.L.T. 721 (S.C.); Simplex Infrastructures Ltd. v CST reported in 2016 (42) S.T.R. 634 (Kar.); Gopal Zarda Udyog v CCE reported in 2005 (188) E.L.T. 251 (S.C.); Apex electricals Pvt. Ltd. v UQI reported in 1992 (61) E.L.T. 413 (Guj.); Unique Resin Industries v CCE....