Tata Bluescope Steel Private Limited Vs Commissioner of CGST (CESTAT Delhi)
Waste & Scrap Arising During Manufacture Not ‘Manufactured Goods’ for Rule 6(3): CESTAT Delhi
The appellant challenged three orders of the Commissioner (Appeals) upholding demands under Rule 6(3) of the CENVAT Credit Rules, 2004. The appeals involved two issues: (i) demand of 7% of job work charges received for manufacturing goods under Notification No. 214/86-CE, and (ii) demand of 6% of the value of waste and scrap cleared by the appellant.
On the first issue, the appellant contended that the activity treated by the Department as manufacture and permitted to be cleared without payment of duty under Notification No. 214/86-CE could not simultaneously be treated as an exempted service. The appellant also submitted that it had not availed exclusive CENVAT credit and had reversed the common credit under Rule 6(3A). The Revenue argued that the appellant had not maintained separate records or exercised the Rule 6(3A) option and was therefore liable to pay 7% of the value of exempted services.
The Tribunal held that the same activity treated as manufacture could not also be treated as an exempted service for demanding 7% under Rule 6(3)(i). It further observed that the appellant had reversed the amount under Rule 6(3A), a fact not disputed by the Revenue, and that failure to intimate the Superintendent was only a technical requirement. Accordingly, the demand relating to job work charges was held unsustainable.
