Jaipur: <\/strong>The Rajasthan High Court has upheld the levy of central excise duty on the sale of waste and scrap generated from capital goods on which CENVAT credit had been availed, dismissing an appeal filed by Shree Cement Ltd.<\/p>\n\n\n\n A Division Bench comprising Justice Arun Monga and Justice Ashutosh Kumar held that Rule 3(5A) of the CENVAT Credit Rules, 2004 creates a statutory obligation on a manufacturer to pay the duty leviable on the transaction value when such credit-availed capital goods are cleared as waste and scrap.<\/p>\n\n\n\n The dispute arose after Shree Cement cleared scrap of used capital goods, including refractory bricks, conveyor belts, cables, filter bags and discarded plant and machinery. While the company paid excise duty on some categories, it cleared other scrap under VAT invoices without central excise duty, claiming that the items had no specific tariff entry and were therefore non-excisable. <\/p>\n\n\n\n The authorities had consequently raised a demand of \u20b96,33,256, along with interest and an equivalent penalty. The Commissioner (Appeals) and CESTAT upheld the demand, prompting the High Court appeal.<\/p>\n\n\n\n Rejecting the company’s argument, the High Court held that the duty is not dependent on whether the scrap itself emerged from a manufacturing process or has a specific tariff entry. The liability flows from the statutory condition attached to the CENVAT credit already availed on the capital goods.<\/p>\n\n\n\n The Court observed that permitting such clearance without fiscal consequence would allow an assessee to avail CENVAT credit on capital goods and subsequently sell their remnants without corresponding duty liability. <\/p>\n\n\n\n Concluding that there was no infirmity in the CESTAT order or the concurrent findings of the authorities, the Rajasthan High Court dismissed Shree Cement’s appeal. <\/p>\n\n\n\n The Court held that where capital goods on which CENVAT credit was availed are sold as waste and scrap, the manufacturer is bound to pay the applicable excise duty.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" No Excise Escape on Scrap Sale: HC Upholds Duty Liability on Shree Cement Jaipur: The Rajasthan High Court has upheld the levy of central excise duty on the sale of waste and scrap generated from capital goods on which CENVAT credit had been availed, dismissing an appeal filed by Shree Cement Ltd. A Division Bench … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":9195,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wppp_is_locked":false,"_wppp_selected_plans":[],"footnotes":""},"categories":[69,29],"tags":[1926,1939,1935,1199,1929,1937,1671,1927,1936,1938,1931,561,1667,477,659,43,278,1930,1933,1928,1932,1719,1846,1934],"class_list":["post-9323","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rajasthan-high-court","category-top-stories","tag-capital-goods","tag-capital-goods-scrap","tag-cement-industry","tag-central-excise","tag-cenvat-credit","tag-cenvat-credit-rules","tag-cestat","tag-excise-duty","tag-excise-duty-liability","tag-excise-law","tag-gst-and-excise","tag-high-court-judgment","tag-indirect-tax","tag-judicial-decision","tag-rajasthan-hc","tag-rajasthan-high-court","tag-rajasthan-judiciary","tag-rule-35a","tag-scrap-sale","tag-shree-cement","tag-shree-cement-case","tag-tax-law","tag-tax-litigation","tag-waste-and-scrap"],"_links":{"self":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/comments?post=9323"}],"version-history":[{"count":1,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9323\/revisions"}],"predecessor-version":[{"id":9324,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/posts\/9323\/revisions\/9324"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/media\/9195"}],"wp:attachment":[{"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/media?parent=9323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/categories?post=9323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lawsandlegals.com\/english\/wp-json\/wp\/v2\/tags?post=9323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}