Shreno Ltd Vs C.C.E (CESTAT Ahmedabad)
CESTAT Ahmedabad held that duty not leviable on scrap which is neither generated from the manufacturing nor generated from the cenvatable input or capital goods.
Facts- The appellants are engaged in the manufacture of glass and glassware items. During the audit, it was noticed that some value against the sale of scrap is appearing in the balance sheet of the appellant. The appellants clarified that they have discharged the Excise Duty in respect of the manufacturing scrap and scrap generated out of cenvatable input/capital goods. They have not paid duty on others since they are not liable to pay the duty. However, Show Cause Notice came to be issued, wherein, the demand of Excise Duty on all the scraps was raised. The Adjudicating Authority confirmed the demand and Learned Commissioner(Appeals) upheld the same by an order in appeal.
Conclusion- The Show Cause Notice was baldly issued without carrying out any investigation that whether the appellant have availed the Cenvat Credit in respect to the scrap which were cleared without payment of duty and also the manufacturing scrap. In absence of any such investigation the allegation made in the Show Cause Notice is bald and without any support of any evidence. In this position the submission of the appellant must be taken as correct as there is no contrary material adduced by the revenue either in the Show cause Notice or even during adjudication. Therefore, it is clear that the appellant have cleared the scrap which is neither generated from the manufacturing nor generated from the cenvatable input or capital goods. Therefore, the same is clearly not liable to any duty.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The appellants are engaged in the manufacture of glass and glassware items. During the audit it was noticed that some value against sale of scrap is appearing in the balance sheet of the appellant. Accordingly, the range superintendent vide letter dated 06.03.2013, asked the appellant to furnish the details of all scrap cleared from their factory premises that reflected in their balance sheets for the period from 2008-09 to 2012-13 upto (January,2013). In compliance to the said letter, the appellant submitted the details of all the scrap cleared by them from factory vide letter dated 11.03.2013, wherein they have clarified that they have discharged the Excise Duty in respect of the manufacturing scrap and scrap generated out of cenvatable input/capital goods. They have also clarified that other than these two types of scrap, since they are not liable to pay the duty, they have not paid the duty. However, Show Cause Notice came to be issued, wherein the demand of Excise Duty on all the scraps was raised. The Adjudicating Authority confirmed the demand and Learned Commissioner(Appeals) upheld the same by order in appeal, which is impugned herein, Therefore, the present appeal filed by the appellant.
2. Shri Saurabh Dixit, Learned Counsel appearing on behalf of the appellant at the outset submits that the Show Cause Notice has demanded the Excise Duty despite the appellant clarified that they have not paid duty on the scrap which is other than manufacturing scrap and cenvateable scrap. He submits that the scrap which is not generated during manufacture but general scrap on which no Cenvat Credit was taken excise duty is not payable. Accordingly, the Show Cause Notices are void and illegal. He submits that on the identical issue in the appellant’s own case, this tribunal has decided the issue in their favour. He placed reliance on the following judgments:
