9911796707
TMI Blog2006 (11) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether in case no modvat credit is availed, the respondents were still liable to pay excise duty on sale of gun metal scrap under Sub-heading 8002.20 of the Central Excise Tariff Act, 1985 as held by the Commissioner ?" 3. The facts leading to this case are that during the period from 1.4.1997 to 30.09.2001, the assessee has sold certain gun-metal scrap along with other waste on which no duty was paid. A show cause notice was issued on 2.5.2002 raising a demand of Rs.21,98,714/- in respect of clearance of such waste and scrap of capital goods. However, at the final adjudication vide order dated 21.11.2002, the demand amounting to Rs.6,36,624/- was only confirmed in respect of copper scrap, electrical cable scrap, gun metal scrap and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap of inputs and was not excisable goods at all. For the applicability of Rule 57 AB (2) (b) and 57S (2) ©, it was urged that these capital goods have themselves been removed and sold as capital goods and not otherwise. About the conveyor belt, it was very old having installed in seventies and early eighties, in respect of which no modvat credit was availed because when they were brought into the factory modvat credit was not even available. 6. The Adjudicating Authority found that the assessee has availed modvat credit on capital goods that is shaft bush, out of which gun metal scrap has arisen and in terms of the provisions of Rule 57S(2) (g) as it prevailed prior to 1.4.2000 was waste of capital goods was required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods independent of provisions of Rule 57S/57AB. 9. The show cause notice was clearly in respect of removing scrap from the site in respect of which modvat credit has been availed. The reason is not far to seek. The assessee does not manufacture capital goods, therefore, the capital goods used in manufacturing the commodity which he produces as and when re-sold does not attract excise duty. Therefore, by necessary corollary the scrap and waste of capital goods removed and sold by the assessee does not attract excise duty by itself. It is only when in respect of capital goods a manufacturer availed modvat credit of Duty paid thereon whatever realization he makes from such capital goods when sold as scrap or waste, he has to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is also in consonance with the provisions of Rule 57S (2) (c) and 57AB (2) (b). The condition in either case is that capital goods itself has been sold as scrap. There is no dispute that shaft bush the capital goods on which modvat credit was availed has not become scrap and was not sold by the assessee. Apparently, the provisions of Rule 57S (2) (c) and 57AB (2) (b) are attracted only when the capital goods are sold and removed from the factory as scrap and waste. One of the components of the machine could not be subjected to provisions of Rule 57S and 57AB unless the machine or component part thereof itself has been sold as such. It is not the case of the revenue in respect of gun metal that the component part of the machine itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
