2017 (12) TMI 1307

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..... er S.K. Mohanty 1. The issue involved in both these appeals are identical and accordingly, the same are taken up for hearing together and a common order is being passed. 2. Brief facts of the case are that the appellants are engaged in the manufacture of PSC sleeper, which are solely used by Indian Railways for laying down or maintenance of railway track. The said sleepers are manufactured by th .....

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..... at the factory were removed clandestinely, without payment of Central Excise duty. The Department has also alleged that the appellants have not followed the procedures prescribed under Rule 21 of the Central Excise Rules, 2002 for remition of duty on those defective goods. Accordingly, the Department initiated show cause notice proceedings against the appellant, seeking confirmation of the duty d .....

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..... leepers, which were not found fit for use by Indian Railways, the same were sold by the appellants as scrap on payment of appropriate Central Excise duty. Thus, she submits that since the defective PSC sleepers were not removed out of the factory, there was no requirement of payment of any Central Excise duty and also for observance of the procedures laid down in Rule 21 of the Rules. 4. On the o .....

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..... leepers to Indian Railway only. The final test of such concrete sleepers is conducted by Indian Railway agency by breaking few sleepers which are rejected by the Inspecting agency. Therefore I find sufficient force in the Noticee's contention that Railway sleepers attain the stage of marketability only when the sleepers are found fit for use by Indian Railways. The broken sleepers are dutiable onl .....

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..... 1 register, the demand cannot be fastened on the sole ground that the procedures laid down in Rule 21 of the Rules have not been followed by the appellants. Since, the defective PSC sleepers, in question, were not removed from the factory, and were sold as waste scrap on payment of appropriate duty, I am of the considered view that the duty demand confirmed in the impugned orders cannot be sustain .....

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