2008 (1) TMI 702 - AT - Central Excise

Summary

Issues:
- Appeal against order setting aside duty on clearance of old and used 'press felt'
- Liability to pay duty on clearance of old and used capital goods
- Interpretation of Cenvat Credit Rules
- Determination of dutiability of old and used Press Felt
- Applicability of statutory provisions and Board's Circular

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi was filed by the Revenue against the order-in-appeal No. 46/CE/SB/2005, wherein the demand of duty on the clearance of old and used 'press felt' was set aside by the Commissioner of Central Excise (Appeals), Ludhiana. The Revenue contended that the respondent cleared old and used paper pulp, utilized by customers as Press Felt, and should be liable to pay duty on the clearance of capital goods. The Revenue argued that duty should be paid after allowing deductions on depreciations under Rule 57-S(2) of the erstwhile Central Excise Rules, 1944, citing the decision in the case of Steel Authority of India Ltd. v. CCE, Raipur.

On the other hand, the respondent, represented by an advocate, reiterated the findings of the Commissioner (Appeals), asserting that they cleared old and used Press Felt, for which there was no provision for payment of duty. The respondent relied on previous tribunal decisions, including M/s. Nakodar Copra. Sugar Mills Ltd. v. CCE, Jalandhar, to support their position.

After considering the arguments from both sides and examining the records, the Tribunal noted that the respondent indeed cleared old and used Press Felt, not as scrap as mistakenly concluded by the Commissioner (Appeals). The Tribunal emphasized that the clearance of old and used Press Felt is not dutiable, citing precedents like M/s. Windals Precisions Pvt. Ltd., which held that there is no duty requirement on the sale of used machinery. The Tribunal also highlighted that the Board's Circular cannot override statutory provisions, ultimately rejecting the appeal and upholding the Commissioner (Appeals) decision.

In conclusion, the Tribunal found no reason to interfere with the order of the Commissioner (Appeals) and rejected the appeal, affirming that duty cannot be demanded on the clearances of old and used Press Felt based on the established legal principles and precedents cited during the proceedings.