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2005 (6) TMI 422 - AT - Central Excise
Issues:
1. Appeal against order-in-appeal passed by the Commissioner (Appeals) regarding excise duty on capital goods removed from the factory. Analysis: The appeal before the Appellate Tribunal CESTAT, New Delhi involved a dispute regarding the liability of the appellants to pay appropriate excise duty on capital goods removed from the factory. The respondents, engaged in manufacturing excisable goods, had purchased capital goods on which credit was taken. The issue arose when the capital goods were removed from the factory by reversing the credit, leading to a show cause notice (SCN) being issued to the appellants. The revenue contended that the reversal of credit at the time of removal was not sufficient under Rule 57S(1)(ii) of the Central Excise Rules, necessitating the payment of excise duty. However, the respondents relied on a Board Circular clarifying that the reversal of credit was indeed sufficient in such cases. The Commissioner (Appeals) had allowed the appeal based on a decision of the Larger Bench in a previous case. The Tribunal, in its analysis, highlighted the relevant provisions of Rule 57S(1)(ii) of the Central Excise Rules, which require capital goods to be removed from the factory after paying appropriate duty as if they were manufactured in the factory. Drawing parallels with a previous case involving inputs, the Tribunal emphasized that the reversal of credit taken on such inputs was deemed sufficient for their removal from the factory. Considering the Tribunal's previous decision and the circular providing clarification, the Tribunal found no fault with the impugned order and dismissed the appeal. In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) based on the interpretation of relevant rules and precedents, ultimately determining that the reversal of credit on capital goods was indeed adequate for their removal from the factory. The appeal filed by the revenue was therefore dismissed by the Appellate Tribunal CESTAT, New Delhi.
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