TaxTMI 
TaxTMI 
2022 (3) TMI 935
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....correct availment and utilization of CENVAT credit. (ii) incorrect availment of CENVAT credit of service tax on ineligible import services. (iii) short payment of duty on scrap sales. 2. Pursuant thereto a show cause notice No.303 dated 20th April, 2018 was served upon the appellants proposing the recovery of service tax amounting to Rs. 2473027/- as was wrongly availed as CENVAT credit. Central Excise duty amounting to Rs. 495376 being the short payment of duty on scrap sales was also proposed to be recovered along with the interest and the proportionate penalties. The said proposal was confirmed by Order-in-Original No.19/IND dated 06.10.2020. The appeal there against was filed and has been partly allowed vide Order-i....
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....rising out of wear and tear of building and the furniture as such the said scrap is non-excisable. Due to this reason only that the duty on the said scrap has not been paid. Learned Counsel has relied upon the decision of Hon'ble Apex Court in the case of UOI Vs Delhi Cloth & General Mills, AIR 1963 SC 791 to impress upon that the scrap since is generated without any deliberate treatment, labour or manipulation hence cannot be considered as a manufactured good. Decision of Hon'be High Court, Bombay in the case of Hindalco Industries Limited Vs UOI, 2014 (12) TMI 657 has also been relied upon to emphasis that mere coverage of a particular item in its relevant tariff entry cannot be readily constructed to have any deeming effect in relation t....
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....g generated out of any manufacturing activity and is therefore non-excisable. Marketability thereof alone is not sufficient for demanding Excise duty upon the said scrap. 6. After hearing the rival contentions and perusing the record, it is observed and held as follows: There is no dispute that on the maximum part of the scrap sold by the appellants, the Excise duty has duly been paid by the appellants. Following are the scrap items on which the appellant has not paid the Excise duty: a. Spent Oil with drum (Hazardous waste) b. Corrugated box scrap c. Wooden box scrap d. Waste material (Kachara) e. Empty drum of plastic f. M.S. Scrap of structural steel g. M.S. Empty drum.....
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....ed for being called as manufacture is not just the specification of the goods but a specification of the process i.e. a process which a raw material has undergone to be transformed into a new product of skillful manipulation. 8. The goods have to satisfy the test of being produced or manufactured in India. It is settled law that excise duty is a duty levied on manufacture of goods. Unless goods are manufactured in India, they cannot be subjected to payment of excise duty. Simply because a particular item is mentioned in the First Schedule, it cannot become exigible to excise duty. Therefore, both on authority and on principle, for being excisable to excise duty, goods must satisfy the test of being produced or manufactured in India in ad....
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.... Union of India, AIR 1968 SC 922 1978 (2) E.L.T. 336 (SC) and in line of other decisions has explained the meaning of the word 'manufacture'. 10. In the present case, the above mentioned scrap apparently reveals that no raw material has been used for those scrap to be generated nor the said scrap is the outcome of any process or any kind of deliberation or manipulation being done by appellant to their raw material. Those are not even the by-products emerging unintentionally in the process of manufacturing as is the case of bagasse in manufacture of sugar from sugarcane as raw material. The scrap in question is purely the leftovers of the packing material or the worn out parts of the consumables used by the appellant in their prem....