No Penalty for Scrap Goods Cleared Without Further Manufacturing Process After Paying Duty Equivalent to CENVAT Credit Taken

Balmer Lawrie & Co. Vs Commissioner of GST & Central Excise (CESTAT Chennai)

Introduction: In a significant case involving Balmer Lawrie & Co., the Commissioner of GST & Central Excise, CESTAT Chennai has made a ruling concerning central excise duty payable on metal containers returned to the factory and subsequently cleared as scrap without undergoing any further manufacturing process. This decision has far-reaching implications for businesses dealing with returned goods and central excise duty.

Detailed Analysis:

Background: The case revolves around Balmer Lawrie & Co., which is engaged in the manufacturing of metal containers, including drums and barrels, falling under Chapter 73 of the Schedule to the CETA, 1985. The company encountered issues related to availing credit on rejected and returned metal containers and the subsequent clearance of these containers as scrap.

Key Points of the Case:

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