2008 (8) TMI 653 - AT - Central Excise

Summary

Issues:
Appeal against Commissioner (Appeals) order regarding duty on sale of waste and scrap of capital goods without proper declaration and invoice.

Analysis:
The appellant was availing credit on inputs and capital goods under specific rules of the Central Excise Rules, 1944. It was found during checking that waste and scrap of capital goods were sold by the appellant using "stores challans" without proper declaration. The original authority demanded duty of Rs. 7,05,731/- along with a penalty for the same. The Commissioner (Appeals) upheld this decision.

The appellant argued that the waste and scrap sold were from non-modvated goods related to capital goods purchased before 1994 when Modvat credit on capital goods was not available. They claimed that the detailed chart of waste and scrap, including rejected packing material, was not considered. Additionally, they contended that the annexure to the show cause notice did not specify that the waste and scrap were from capital goods purchased after 1994.

The Tribunal considered the submissions from both sides. It was noted that the documents provided by the appellant were legible, contrary to their claim. The authorities found that the waste and scrap in question related to capital goods received after the introduction of Cenvat credit on capital goods. The invocation of the extended period for demand was deemed justified as the sale of waste and scrap had not been disclosed to the department. The penalty imposed was reduced to Rs. 1,00,000/- due to the nature of the goods involved.

In conclusion, the Tribunal upheld the demand for duty and interest but reduced the penalty imposed on the appellant. The appeal was disposed of accordingly.