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TMI Blog2016 (3) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 57S(2) (b) when capital goods are removed without being used, from the factory for home consumption the duty payable shall not be less than the amount of credit that has been allowed in respect of such capital goods under Rule 57Q. He submits that there are three types of clearances provided under Sub-Rule 2(a),(b) & (c). As per Sub-Rule 2(c) where capital goods are sold as waste and scrap, the manufacturer is required to pay duty leviable on such waste and scrap. He submits that in the present case there is no dispute, the unused capital goods was sold as waste and scrap. For the purpose of clause (c) of Sub-Rule (2) of Rule 57S there is no condition that the capital goods if sold as waste and scrap should be first installed and used, therefore even though the capital goods is removed without being used but as waste and scrap, the duty payable should be on the transaction value of the waste and scrap so sold. In support of his arguments he placed reliance on the following judgments. (i) Motor Industries Co. ltd. vs. Commissioner of C. Ex, Bangalore 2004 (167) ELT 242 (Tri Bang) (ii) Hind Spinners Industries Growth centre vs. Commr. of C. Ex, Indore 1997 (96) ELT 651 (Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty of excise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such capital goods under rule 57Q; (b) where capital goods are removed after being used in the factory for home consumption on payment of duty of excise or for export under rebate on payment of duty of excise, such duty of excise shall be calculated by allowing deduction of 2.5 per cent of credit taken for each quarter of a year of use or fraction thereof, from the date of availing credit under rule 57Q; and (c) where capital goods are sold as waste and scrap, the manufacturer shall pay the duty leviable on such waste and scrap." From the above Sub-Rule (2) in clause (a) it is clearly provided that if the capital goods are removed without being used the excise duty payable shall in no case be less than the amount of credit that has been allowed. The claim of the appellant is that as per Clause (c) they are required to pay duty on the sale of waste and scrap when capital goods are sold as waste and scrap. In the present case, even though the appellant cleared the capital goods declaring it as waste and scrap but the fact remains that the said capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p or after partially being used. Therefore, the facts are different. Similarly in the case of Ballarpur Industries ltd. (supra) is also on the issue whether credit can be taken on receipt of the capital goods which is yet to be installed. All these judgments are on different facts hence, the same are distinguished. As regard the submission on penalty, I find that the Ld. Counsel has based his argument on Explanation to Section 38A related to saving clause which is reproduced below: "38A. Effect of amendments, etc., of rules, notifications or orders.- Where any rule, notification or order made or issued under this Act or any notification or order issued under such rule, is amended, repealed, superseded or rescinded, then, unless a different intention appears, such amendment, repeal, supersession or rescinding shall not- (a) revive anything not in force or existing at the time at which the amendment, repeal, supersession or rescinding takes effect; or (b) affect the previous operation of any rule, notification or order so amended, repealed, superseded or rescinded or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kg and subsequently cleared the goods as such to the original manufacturer. From this it emerges that the goods in question were not put to use by them and were termed as scrap for technical reasons and loss of shelf, as stated by the appellant. 6.4 It thus emerges that the appellant had removed the said capital goods on which they had availed modvat credit in terms of the Rule 57 of the erstwhile Central Excise Rules, 1944 as such i.e. without being put to use in their factory. As per erstwhile Rule 57S(2); 2) In a case,- (a) where capital goods are removed without being used from the factory for home consumption, on payment of duty, or for export on payment of duty of excise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such capital goods under rule 57Q; (b)...... (c)................ (emphasis supplied) In as much as the appellant had removed the above said Capital goods without putting them to use to the original manufacturer, they were required the pay duty on the above said capital goods in terms of Rule 57S(2) (a) of the erstwhile Central Excise Rules, 1944. 6.5 The appellant have contended that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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