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M/s Ultratech Cement Ltd. Versus Commissioner of Central Excise, Nagpur

2016 (3) TMI 995 - CESTAT MUMBAI

CENVAT credit on capital goods removed as waste and scrap - Whether the capital goods, if removed, without installation and without putting to use, as waste and scrap will attract duty equal to the amount of credit taken or the duty on the transaction value of the machine sold as waste and scrap - Held that:- The facts is not under dispute that the appellant have availed the Modvat Credit on capital goods which was neither installed in the factory of the appellant nor used for the manufacture of .....

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hout being used is different from the capital goods sold as waste and scrap that means the term sale of capital goods as waste and scrap then the excise duty shall be payable on the transaction value of the waste and scrap. It is to be kept in mind even after use for some time if the capital goods is sold then also the excisable duty is payable in terms of Clause (b) after allowing the deduction of 2.5% of credit taken for each quarter. Therefore when the capital goods is not installed or has no .....

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of rule 57S(2) held that the removal of capital goods in the present case is covered under Sub-rule (2)(a). - Decided against assessee - Appeal No. E/1622/2010 - A/86089/16/SMB - Dated:- 16-2-2016 - Ramesh Nair, Member (J) For the Appellant : Shri Rajesh Ostwal, Adv For the Respondent : Shri R K Maji, Asstt. Commr. (AR) ORDER Per Ramesh Nair This appeal is directed against Order-in-Appeal No. SR/179/NGP/2010 dated 10.06.2010 passed by the Commissioner of Customs & Central Excise (Appeals) Na .....

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the demand of equal amount of Cenvat Credit availed on the capital goods was confirmed and upheld by the ld. Commissioner (Appeals) on the ground that as per 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 Su .....

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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 (Tribunal) (iii) Ballarpur Industries Ltd. vs. Commissioner of C. Ex, & Cus., Nagpur 2003 (156) ELT 423 (Tri-Mumbai) The present case was made .....

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C. Ex, Meerut 2000 (119) ELT 715 (Tribunal-LB) (ii) Commissioner of Central Excise, Coimbatore vs. Ranga Vilas GS & W Mills 2002 (149) ELT 742 (Tri-Chennai) (iii) Shaw Wallace Co. Ltd. vs. Commissioner of Central Excise, Kanpur2003 (156) 406 (Tri-Del). 4. On the other hand, Shri R.K. Maji, Ld. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. I have carefully considered the submissions made by both the sides. The facts is not u .....

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llowed in respect of duty paid thereon- (1) The capital goods in respect of which credit of specified duty has been allowed under rule 57Q may be- (i) used in the factory of the manufacturer of the final products; or (ii) removed, after intimating the Assistant Commissioner of Central Excise, having jurisdiction over the factory and after obtaining dated acknowledgement of the same, from the factory for home consumption or for export, on payment of appropriate duty of excise leviable thereon or .....

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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 g .....

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(2) it is clear that there are three stages of removal of capital goods (i) where capital goods are removed without being used, (ii) where capital goods are removed after being used and (iii) where capital goods are sold as waste and scrap. Therefore, intention of the legislature is very clear that when the removal of capital goods is without being used is different from the capital goods sold as waste and scrap that means the term sale of capital goods as waste and scrap then the excise duty sh .....

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uired to pay excise duty on the capital goods cleared without being used in terms of clause (a) of Sub-rule (2) of Rule 57S of the Central Excise Rules, 1944. Accordingly, equal amount of Cenvat Credit which has been availed shall be payable by the appellant. As regard, the judgments relied upon by the Ld. Counsel, I find that in case of Motor Industries co. ltd. (supra) the capital goods was destroyed in fire and thereafter it was cleared as waste and scrap. The Tribunal has given the observati .....

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t from the facts of the present case. In the case of Hind Spinners Industries Growth Centre (supra) the stage of availing modvat credit in respect of capital goods that whether credit can be taken and utilized before installation of machine or thereafter. This case is not on the issue of removal of capital goods either as such or as waste and scrap or after partially being used. Therefore, the facts are different. Similarly in the case of Ballarpur Industries ltd. (supra) is also on the issue wh .....

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r 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 rig .....

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r punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the rule, notification or order, as the case may be, had not been amended, repealed, superseded or rescinded." From the above Explanation it is very clear that any act or omission shall not be punishable if the said act or omission would not have been punishable in the old provision. In the present case .....

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the fact of those cases are different from the facts of the present case. Hence, the ratio of those judgments are not applicable in this case. Hence, the ratio of those judgments are not applicable in this case. On perusal of the impugned order, I find that the ld. Commissioner by careful application of mind, after interpreting the provisions of rule 57S(2) held that the removal of capital goods in the present case is covered under Sub-rule (2)(a). The finding portion of the impugned order is r .....

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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 .....

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quired 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 they had filed the classification declaration under Rule 173B ibid declaring the scrap of Castables, classifying the same under Chapter sub heading No. 3816.00 and removed the same by following he proper procedure laid down under Central Excise Law. However, on perusal of the records, it transpires that the appellants in their classifi .....

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