TMI Blog2002 (10) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged that this mis-declaration on the part of the appellants appeared to be with an intention to evade payment of appropriate duty on the same and appeared to have suppressed regarding disposal of inputs demand of appropriate credit taken and thereby proviso to Rule 57-I(1)(ii) of C.E. Rules, 1944 read with proviso to Section 11A(1) of C.E. duty was invoked for demand of duty for extended period of five years in both these appeals, besides invoking penal provisions. 2.The appellants submission in this matter had been that - (a) the credit has been availed on receipt of the components based on duty paying documents. (b) Necessary declaration had been filed and credit had been availed only after the receipt of the components. (c) The components were eligible inputs in the manufacture of declared final products viz. Motor vehicle chassis falling under Chapter 87. (d) The credit availed had been used for clearance of chassis falling under Chapter 87 of Central Excise Tariff Act, 1985. (e) The components in question when issued to production line had been found defective and unfit for use in assembly by the manufacturing/production departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut duty had been paid for such input, credit had been availed. Only then components that have become obsolete or in the course of manufacture found to be defective are rejected/scrapped. Such components have been sold as waste and scrap of ferrous and non-ferrous metals. There had been payment of duty on waste and scrap. 4.They have filed necessary RT 12 returns with the department enclosing relevant invoices. RT 12 returns are being filed not only to comply with the statutory requirement but also for the department to find out from such returns if there had been any infraction as regards payment/non-payment of duty. 5.That just because no action had been taken in respect of RT 12 returns filed showing payment of duty as waste and scrap there can be no allegation of suppression of fact with intention to evade payment of duty. 6.As the duty has been paid there had been no clandestine removal of the goods and it is contended that what is cleared is not waste and scrap, it is for the department to establish as to how the market understands the goods seen as waste and scrap to scrap dealers and therefore there was no question of their being identified as components that the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted them for the reasons given in the Order-in-Original. The Commissioner (Appeals) modified the order to some extent and rejected with regard to other claims. In both the appeals, the appellants have also not contested on few grounds on which duty has been confirmed but have contested on the following grounds which were taken up for confirming duty. (1) does not conform to specifications (2) defective inspection (3) handling damage in transit The demand in respect of M/s. Salem Traders Magnetic Enterprises to the extent of Rs. 1,13,828/- and Rs. 3,10,230/- respectively confirmed in the order No. 30/97 dated 10-12-97 passed by the CCE, Chennai which is in Appeal E/824/98. 11.We have heard learned Counsel Shri R. Raghavan and ld. DR Shri A. Jayachandran. 12.Ld. Counsel submitted that with regard to first second ground of confirmation i.e. does not conform to specification and defective inspection the items when removed from stores are against a specific work order issued by the concerned line in the factory and work orders are raised on the actual requirement of the components for production and it is only the production line in which it is asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that it was not possible to identify the supplier as all the items were small parts run into thousands and wherever they identified the supplier, those items were returned and such items are not subject matter of dispute. 15.We have carefully considered the submissions made by both sides and have perused both the orders. 16.In Appeal E/672/2000, the order-in-appeal passed by Commissioner of Central Excise (Appeals), Chennai is in question. The Commissioner has not accepted the plea to treat the item under which the demands have been confirmed. Six categories under which the components were categorized for claiming benefit has now been reduced to only two grounds i.e. (1) does not conform to specification, (2) found defective on inspection. 17.It is the contention of the appellants that the parts have become obsolete/scrap and are not in a position to be used as said items and they were found such during the course of production and they had been scrapped. It is their contention that so long as the items is scrap then in terms of Rule 57D the benefit cannot be denied. On perusal of Rule 57D, we notice that credit of duty cannot be denied or varied on the ground that part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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