2006 (11) TMI 458 - AT - Central Excise

Summary

Issues involved: Allegation of clandestine removal of moulding patterns without payment of duty u/s Notification No. 46/94-C.E. and No. 56/95-C.E.

Summary:
The appellant, a PSU Unit, obtained clearance from the Committee of Secretaries but faced demands on moulding patterns manufactured and utilized in their factory under specific Notifications. The Original Authority alleged clandestine removal of patterns without duty payment, which the appellants denied. The authorities assumed clearance without utilization, leading to the challenge of the order.

The learned Consultant argued that the patterns were manufactured for internal use as per the Notification, denying any violation or clandestine removal. The departmental view was reiterated by the JCDR.

Upon careful consideration, the Tribunal found the allegation of clandestine removal unsubstantiated. The appellants contended that the patterns were fully utilized within the factory and not removed unutilized. The authorities based their decision on invoices showing removals but did not consider the appellants' denials and explanations. The appellants clarified that the cleared items were labeled as "second hand," indicating no duty requirement. As per the Notification conditions, the patterns were fully utilized and cleared appropriately. Therefore, the appeal was allowed, acknowledging compliance with the Notification and the clearance of patterns as "second hand" items not subject to duty. Consequential relief was granted.

*(Operative portion of this Order was pronounced in open Court on conclusion of hearing)*