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TMI Blog2007 (7) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005, upholding the order-in-original by which demand of duty of Rs. 95,079/- on clearance of scrap valued at Rs. 5,94,241/- cleared as "old and discarded machinery" was confirmed and a penalty of Rs. 20,000/- was imposed on the appellant with the demand of interest on the duty amount. 2. The appellant was engaged in the manufacture of cane sugar and molasses. According to the Revenue, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arded only after they were used to a maximum extent and had lost their utility. Reliance was placed on the decision of the Tribunal in Hindalco Ind. v. CCE, reported in 2002 (144) E.L.T. in support of the case. 4. The learned Counsel appearing for the appellant argued that, clearance of old and discarded goods cannot be considered to be clearance of capital goods "as such". He submitted that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 3(4) of Cenvat Credit Rules, 2001, it is only where the inputs/capital goods were removed "as such", that the reversal of credit of duty of demand should be asked by the Revenue. It is only from 16-5- 2005 that the capital goods cleared, as waste and scrap by the manufacturer be came liable to payment of duty equal to the duty leviable on the transaction value by introduction of sub-rule (5)(a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Cenvat Credit Rules, 2002, required the manufacturer to pay amount equal to credit availed in respect of the capital goods removed "as such" from the factory. It is obvious that the worn out parts of machinery, which are discarded as scrap after their utility is totally lost as part of such machinery, cannot be considered to be the machinery (which is capital goods) "as such". Therefore, no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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