The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the use of fire brick that is dismantled from the undershell of a kiln is not obligated for the duty of waste or scrap.
The bench of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) has witnessed that occasionally, fire bricks from the kiln are to be dismantled and then removed since they evolved ineffectively.
The dismantling method is also not in conflict. The firebricks that are being dismantled from the inner shell of the kiln can be treated only as waste and scrap. It is not disputed that the waste and scrap of fire bricks are not taxable commodities.
Recommended: Current GST Rate and HSN Code on Construction Services
The petitioner furnished that post usage of the fire brick on which credit was carried on capital goods, it became waste and scrap and was useless even as waste and scrap, and it was thrown outside the factory. Under Rule 3(5A) of the Cenvat Credit Rules, 2004, the Excise duty by computing it and deducting 2.5% per quarter does not need to be filed.
The problem was whether the petitioner was obligated to file the tax on waste and scrap of fire brick after use in the kiln during the period 2010–11 (up to February 2015) as per Rule 3 (5A) of the Cenvat Credit Rules, 2004.
The taxpayer argued that the same had accurately filed the tax on the value of the transaction.
But rule 3 of the Cenvat Credit furnished that for the removal of capital goods as waste and scrap, the taxpayer is needed to pay the tax post-reducing 2.5% per quarter for the period of use of capital goods.
Read Also:- CESTAT: Police Do Not Engage in Security Business Therefore No Service Tax Will Be Levied
The provisions of Rule 57S(2)(c) of the Central Excise Rules, 1944, concerned with the way of utilization of the capital goods and the credit authorized concerning the filed tax.
The firebricks, which became waste and scrap, are being sold. The same could be utilized only for reprocessing to extract the chemicals that can be recycled and utilized in the manufacture of fresh firebricks. No entry is there in the tariff levying any tax on waste and scrap of firebricks, and, thus, it is a non-excisable commodity, the tribunal observed.
| Case Title | Orient Glaze Pvt Limited Versus Commissioner of Central Excise & ST, Anand |
| Case No.:- | EXCISE Appeal No. 12157 of 2016-DB |
| Date | 23.04.2024 |
| Counsel For Appellant | Shri Anil Gidwani, Advocate |
| Counsel For Respondent | Shri P. Ganesan, Superintendent (AR) |
| Ahmedabad Bench of CESTAT | Read Order |
