Order date: 28 September 2022

Facts: 

• The Appellant, M/s Rajasthan Tube Manufacturing Company Limited, is a company that is engaged in the manufacture of ERW Steel Tubes/ Pipes falling.
• It was observed that the appellants have sold zinc dross/ ash without payment of duty during the period 4/16 to 6/17. Such zinc dross/ ash is generated during galvanizing of pipes. Further, the appellant was not maintaining separate records, therefore, they were required to pay an amount equal to 6% of the price of such zinc dross/ ash as per Rule 6(3) (i) ibid, which since was not paid, therefore, demand of Rs.1,87,150/- was raised.
• Another demand of Rs.1,55,513/- was raised alleging duty is payable on clearance of zinc parts/ scrap of the old plant.
• Both the demands were confirmed vide impugned orders under Rule 14(1)(ii) ibid read with Section 11(10) of 3 Central Excise Act, 1944 with interest under Rule 14(1)(ii) read with 11AA(1) & (2) and an equal penalty was imposed under Rule 15(2) with Section 11AC(1)(c) ibid.
• Aggrieved, this appeal is filed

Issue:

• Whether demand the of Rs. 1,87,150/- made on clearances of zinc dross/ ash, under Rule 6(3)(i) of Cenvat Credit Rules, 2004 is rightly raised and Whether demand the of Rs. 1,55,513/- has been rightly made on clearance of old plant, which consists of zinc parts.

Order:

• The Authorities observed that the invoice does not contain a description of a scrap of zinc plant. Further, the appellant has not produced any evidence in support of its contention that they have not taken Cenvat / modvat credit on the old plant.
• It was also observed by the authorities that the appellant has never disclosed to the department with regard to the transaction and hence duty would have escaped from the payment, and accordingly upheld the invocation of the extended period of limitation. 
• The Authority observes that the first issue so far concerns the refund of CENVAT credit on clearance of waste products called zinc dross/ash, the issue is fully covered by the judgment of the Hon'ble Supreme Court in the case of Hindustan Zinc Ltd., as the liability to pay presumptive amount of reversal under Rule 57CC arises only for final product and not for waste Accordingly, this matter is decided in favor of the appellant.
• The Authority said that duty cannot be demanded on the parts of the old plant, as these are not manufactured products by the appellant, this ground is also in favor of the applicant.
• Appeal is allowed with consequential benefits.