Case Law Details
Commissioner, Central Excise & CGST Vs R.P. Industries (CESTAT Delhi)
CESTAT Delhi held that mere manual segregation of plastic scrap from the rest of the scrap is neither manufacturing nor producing the plastic scrap and hence no central excise duty is chargeable on removal of the same.
Facts- The respondent manufactures lead ingots/lead rods and is registered with the Central Excise department. One of the raw materials used by the respondent is the lead scrap which is not duty paid and no CENVAT credit was availed on it. This scrap needs cleaning to separate non-lead elements such as plastics before it can be molten to manufacture lead ingots/lead rods. The respondent sold the plastic scrap so removed.
During audit of the respondent by the department, it was felt that duty should be paid on the plastic scrap so separated and sold by the respondent because it had arisen during the process of manufacture of the final products, viz., lead ingots or lead rods.
It was also felt that CBEC’s circular No. 1029/17/2016-CX dated 10.5.2016 squarely applies to this case. Therefore, a Show Cause Notice dated 7.12.2019 was issued to the respondent proposing recovery of duty of Rs. 1,16,17,931 u/s. 11A(4) along with interest u/s. 11AA and proposing to impose penalty u/s. 11AC. The same was confirmed by the Additional Commissioner.
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