Case Law Details
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
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