Case Law Details
Forgings (India) Iron & Steel Limited Vs Commissioner of CGST & Excise (CESTAT Kolkata)
CESTAT Kolkata held that as waste and scrap are not manufactured goods the legislature have consciously not made any provisions for reversal of any credit taken on duty paid inputs in case of clearance of waste and scrap
Facts- The issue involved in the present appeal is as to whether the credit attributable to the inputs contained in waste and scraps, which have not been received from the job worker, is required to be reversed or not.
The Appellant is engaged in the manufacture of various steel forgings as per the drawing and specification of customers falling under Chapters 72, 73 & 84 of the First Schedule to the Central Excise Tariff Act, 1985. The Appellant got some of their goods manufactured through job-workers for which they sent inputs/semi-finished inputs from their factory to various job-workers in terms of Rule 4(5)(a) of the Cenvat Credit Rules, 2004, after taking Cenvat Credit on inputs.
The semi-processed/semi-finished inputs after being processed by job workers were returned to the Appellant. It appears to Revenue that there were always shortages in the number of processed inputs received back by the Appellant. The processed inputs were in lesser quantity than the quantity sent for job work. It appeared that the appellant was not reversing Cenvat credit attributable to inputs contained in the material not received back (waste and scraps).
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