TMI Blog2004 (6) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... ssories thereof; that they have purchased machines and equipment - partly prior to introduction of Modvat credit scheme to capital goods and partly afterwards; that these capital goods are exclusively used by them in the manufacture of I.C. Engines, one of the parts of motor vehicles; that in respect of the Capital goods received after introduction of Modvat credit Scheme, they had availed of Modvat credit of the duty paid thereon; that another Hero Group company namely Hero Briggs Stratton Auto Pvt. Ltd., Appellants No. 2, had taken on lease on 25-8-1998 a part of factory premises of the Appellants No. 1 who had also sold machines and equipment purchased prior to introduction of the Modvat credit scheme in respect of capital goods (i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others who had already paid duty thereon; that thus duty cannot be demanded from them who are not manufacturer of the said goods. He, further, mentioned that duty can also not be demanded under Rule 57S of the Central Excise Rules, 1944 because Rule 57S provides for recovery of the credit wrongly taken whereas the demand of duty is not on the premises that the credit was taken wrongly; that the amount demanded is neither the amount of illegal or wrong Modvat credit nor is the duty of excise and there is no recovery proceeding machinery in the Act and Rules; that in Pushpaman Forgings v. CCE, Mumbai-VII, 2002 (149) E.L.T. 490 (T) the Tribunal has taken the same view relying upon the judgment of the Madras High Court in Eternit Everest Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Jamna Auto Industries Ltd. v. CCE, Indore, 2001 (130) E.L.T. 181 (T) wherein the manufacture of some goods was transferred to newly established Division which had obtained a separate Central Excise Registration and the capital goods were also transferred to the newly established Division; the entire premises had remained as such; the Tribunal has held that for removal as envisaged under Rule 57S, there has to be physical removal. 4. Finally, he submitted that the finding of suppression is wrong as the layout plan shows the premises leased out to Appellants No. 2 and the installation of the capital goods in question therein; that thus the fact of the existence of the capital goods in the part of the factory leased out to Appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that as the premises wherein the impugned capital goods are installed has been leased out to the Appellants No. 2, the capital goods, in respect of which Appellants No. 1 have availed of credit, are no more with them but are installed in the factory of Appellants No. 2; that it is thus clear that the capital goods are no more with the Appellants No. 1 who have taken the Modvat credit of the duty paid on those goods. The Senior Departmental Representative referred to the letter dated 12-3-2001 in which the Appellants No. 2 have mentioned that they had acquired running unit for the manufacture of I.C. engines from the Appellants No. 1 and certain machines to be used in the manufacture of I.C. engines had not been sold to them but these machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final products. Rule 57S deals with the "manner of utilization of the capital goods." As per sub-rule (1) of Rule 57S, the capital goods "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 for export under bond, as if the capital goods have been manufactured in the said factory." 6.3 As the premises in which the capital goods are installed has now been leased to the Appellants No. 2 who are now in possession of the said premises, it cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d" in his factory. The decision in the case of Madras Electro Castings Ltd. is applicable to the facts of present matters. In the said case, the Appellants had lent the capital goods to the neighbouring factory on loan basis. The Tribunal has held that "The Appellants were duty bound to have paid duty on removal of goods." There is a machinery provided in Section 11A of the Central Excise Act for recovering the duty not paid/short paid, etc. In view of this the decision in the case of Pushpaman Forgings and Board's Circular dated 27-9-96 are not applicable. Further the facts in Pushpaman Forgings are entirely different as they related to the applicability of Rule 57CC of the Central Excise Rules and charging of an amount equal to 8% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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