TaxTMI 
TaxTMI 
2023 (11) TMI 11
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....cers recovered (i) a diary containing details of removal of DMF solvent on cash basis from the office of the senior executive, and (ii) a file containing commercial invoices and delivery challans issued for sale of waste and scrap of capital goods and packing materials on which CENVAT Credit was taken by the appellant. After completion of the investigation a SCN dated 28 February 2011 was issued to the appellants proposing to demand as follows: "(a) Excise duty of Rs. 2,02,242/- on 3,53,215 Kg of DMF spent solvent cleared without payment of duty and without issuing invoices during August 2007 to October 2010 (b) Excise duty amounting to Rs. 13,84,146/- under Rule 3(5A) of the CENVAT Credit Rules, 2004 on waste and scrap of various M.S. items and packing materials cleared without payment of duty under commercial invoices during April 2008 to September 2010 (c) Interest amounting to Rs.29,886/- and Rs.3,59,016/- on the above duty amounts at (a) and (b) respectively (d) Penalty under Section 11AC of Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002. (e) Confiscation of and redemption fine in lieu of confiscation on DMF solvent weighing 4,35,575 Kg ....
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....E, Hyderabad V. Everest Organics Ltd., 2008 (226) ELT 554 (Bang) CCE, Hyderabad V. Natco Pharma Ltd., 2007 (208) ELT 573 (Bang) CCE, Hyderabad V. Sreepathi Pharmaceuticals Ltd., 2006 (205) ELT 273 (Bang.) CCE, Hyderabad V.Aurobindo Pharma Ltd., 2006 (200) 236 (Bang) 2.2 With regard to demand of duty in respect of waste and scrap arising out of non-cenvatable parts and components of capital goods and packaging materials of raw materials. It has been submitted that MS, SS and GI scraps and wastes cleared by them did not arise out of capital goods on which CENVAT credit has been taken, rather the same had arisen from the parts and components of the capital goods namely MS Channels, MS pipes, MS Elbows, MS Flanges, Nuts and Bolts on which appellants have not availed any credit at the time of the purchase. These parts and components after certain period of use get worn out and had to be replaced and therefore the worn out parts and components are scrapped time to time and same are cleared without payment of duty as at the time of the purchase of the same no CENVAT Credit has been availed on the same and same not being the manufactured goods of the appellant and therefore no d....
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....dvocate has also mentioned that Board Circular No. 721/37/2003-CX dated 06.06.2003, where under it has been clarified that no duty shall be payable and no reversal of the credit is warranted on waste packages or containers used for packing of the inputs on which credit has been taken, when cleared from the factory of the manufacturer has availed CENVAT Credit as the same could not be treated as scrap on waste arising out of manufacturing process. 3. We have also heard Shri P K Singh, learned Superintendent (Authorized Representative) has reiterated the findings as given in the impugned orderin- original as well as order in appeal. 3.1 Having heard rival submissions, we find that following two questions need to be answered by us : (i) Whether demand of Central Excise duty of Rs. 2,02,242/- on spent solvent (DMF) arising during course of manufacturing of dutiable "Sucralose" is sustainable or not? (ii) Whether credit of Rs. 13,84,146/- need to be reversed as per the provisions of Rule 3 (5A) of the CENVAT Credit Rules, 2004 on clearance of waste and scrap arising out of items on which CENVAT Credit was not availed at the time or purchase and on items which were packing material....
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.... the same question. In Birla Corporation Ltd., this Court observed as follows : In the instant case the same question arises for consideration and the facts are almost identical. We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was, therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd., 2001 (130) E.L.T. 193, cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assesses in a quandary. Birla Corporation Ltd. (supra) is being followed consistently. Since the point involved in the present case is identical to the point involved in Hindustan Petroleum Ltd., (supra) and the department having accepted the principle laid down in Hindustan Petroleum Corporation Ltd., (supra), the department cannot be permitted to take a different stand in the present appeals. 9. Yet again, in Novapan Industries Ltd., following Birla Corporation Ltd., v. CCE and Jayaswals Neco Ltd., v. CCE, Nagpur the Supr....
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....er considerable reuse, which cannot be reused by the appellant in their factory premises and the said solvents are cleared on the invoices from the factory premises of the appellant. It is also undisputed that the appellant was discharging duty liability on this mixture/spent solvents prior to September 2006 but subsequently did not discharge the central excise duty by relying upon the judgment of the Tribunal in the case of Aurobindo Pharma Pvt. Ltd. 8. On perusal of the records, we find that the goods which are cleared by the appellant are mixture of solvents which have been reused in the factory premises over a period of time for the manufacturing of final products i.e. bulk drugs. It is also not disputed by the Revenue in the impugned orders that the solvents are repeatedly used after purification within the factory premises and they get mixed up with various impurities and at a stage when they cannot be reused, they are cleared by the assessee for a consideration. In short, clearances of the mixed solvent, which is done from the factory premises, is the residue, which gets retained after the manufacturing of final products by repeated use of the solvents during the course o....
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....demands raised by the Revenue post 10-5-2008 for which duty provisions of Section 2(d) has been invoked, needs to be addressed now. The said provisions of Section 2(d) defines excisable goods and states that for the purposes of this sub-section, goods includes any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. In the cases in hand, from Appeal Nos. 86521 to 86526/13, 85825/14 and 85851/14, the period involved is post 10-5-2008. Even with the enactment of provisions of Section 2(d) of the Central Excise Act, 1944, the demand raised on the appellant does not get fastened for the simple reason that the show cause notice does not invoke the provisions of Section 2(d) of the Central Excise Act, 1944. All the show cause notices are alleging that the process that is carried out for the purification of the mixed solvents amounts to manufacture as per the provisions of Section 2(f) of the Central Excise Act, 1944. Since the said proposition is already decided by the Tribunal in the case of Aurobindo Pharma Ltd. and followed in the case of Lee Pharma Pvt Ltd. (supra), the question of demanding any ....
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.... definition of "manufacture" as contained in Section 2(f) of the Act. The relevant portion of amended Section 2(f) reads as under : Section 2(f) - "manufacture" includes any process - (i) incidental or ancillary to the completion of a manufactured product; (ii) which is specified in relation to any goods in the section or Chapter notes of [the First Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to [manufacture; or] (iii) which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer; and the word "manufacture" shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production of manufacture on his own account;" 9. The Revenue sought to cover the case under subclause (ii) as per which the process which is satisfied in relation to any goods in the....
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....apital goods/machineries as the said parts /components gets worn out with the passing of time and thus need to be replaced with the fresh materials and the old MS pipes etc becomes wastes and scraps. Since the MS pipes, MS Elbows, MS Flanges etc have been purchased by the appellants but no CENVAT Credit has been availed on the same and therefore at the time of the clearance when same becomes waste and scrap it is cleared without payment of the duty. We also said that such waste and scrap is not arising out of the manufacturing process or from the goods on which CENVAT Credit has been availed by the appellant. We find that department has not produced any evidence to contradict the submissions which have been made by the appellants that the waste and scrap which have been cleared without payment of duty has arisen from the materials on which CENVAT Credit has not been availed by the appellant. We find force in the submissions made by the appellant, as the assertion made by them had not been contradicted by the department by adducing any evidences in this regard. While holding this view we also take shelter of this Tribunal's decision M/s. Padmashri Dr. Vitthalrao Vikhe Patil SSK Vs. ....