Rajasthan Spg. and Wvg. Mills Ltd. Vs. Cce - Court Judgment

Excerpt:

.....57 ab of the rules. the contention is that provisions of the this rule only provide that in case of inputs and capital goods were removed from the factory, the manufacturer has to pay appropriate duty of excise leviable thereon. in the present case as the capital goods are not removed as such only the scrap of goods was cleared. therefore, provisions of this rule are not applicable. the contention is that in absence of any rule under which the duty can be confirmed in respect of the scrap of capital goods, the demand is not sustainable.4. the contention of the revenue is that as per the provisions of the rue 57ab of the central excise rules provides payment of duty by the manufacturer. the capita goods were removed as such. the contention is that as the scrap relates to the capital goods, therefore, they are liable to pay duty.5. in this case the demand is for the period of june, 2000 to may, 2001 and there is no provision under the act or rules which provides payment of duty in respect of the scrap of capital goods. rule 57 ab of the central excise rules, on which revenue relying, is only taking into consideration clearance of inputs as capital goods from the factory of.....

Judgment:

2. Appellant filed this appeal against the order in appeal passed by the Commissioner (Appeals). In this case the demand of duty was confirmed on the ground that appellant had cleared the scrap of capital goods without payment of duty.

3. The contention of the appellant is that the demand is for the period June, 2000 to May, 2001. Prior to 1.4.2000, the Rule 57S(C) Central Excise Rules, 1944 provides the levy of duty on scrap of capital goods on which the credit has been taken. After 1.4.2000, there were no such provisions under the rules. The show cause notice was issued for invoking the provisions of Rule 57 AB of the rules. The contention is that provisions of the this rule only provide that in case of inputs and capital goods were removed from the factory, the manufacturer has to pay appropriate duty of excise leviable thereon. In the present case as the capital goods are not removed as such only the scrap of goods was cleared. Therefore, provisions of this rule are not applicable. The contention is that in absence of any rule under which the duty can be confirmed in respect of the scrap of capital goods, the demand is not sustainable.

4. The contention of the Revenue is that as per the provisions of the Rue 57AB of the Central Excise Rules provides payment of duty by the manufacturer. The capita goods were removed as such. The contention is that as the scrap relates to the capital goods, therefore, they are liable to pay duty.

5. In this case the demand is for the period of June, 2000 to May, 2001 and there is no provision under the Act or Rules which provides payment of duty in respect of the scrap of capital goods. Rule 57 AB of the Central Excise Rules, on which Revenue relying, is only taking into consideration clearance of inputs as capital goods from the factory of manufacturer. In the present case the capital goods are not being removed, only scrap of capital goods is being removed and in absence of any provisions of law during the relevant period the demand and penalty is not sustainable hence set aside. Appeal is allowed.