2011 (3) TMI 842 - AT - Central Excise

Payment of duty - clearance of inputs and capital goods - The duty required to be paid on such removal was not paid at the time of removal but on the 5th day of the next month in terms of the provisions of Rule 8 of Central Excise Rules - The issue is no more res-integra and stand settled by the Tribunal decision in the case of KLRF Textiles vs. CCE, Tirunelveli 2005 -TMI - 54113 - CESTAT, SOUTH ZONAL BENCH, CHENNAI - It was held that fortnightly facility for payment is also available for removal of inputs and capital goods from the factory and is not limited to final products - Interest and penalty dropped - decided in favor of assessee.

Summary

Issues:
- Duty payment on inputs and capital goods
- Demand of interest and penalty by Revenue
- Applicability of Rule 8 of Central Excise Rules
- Precedent decisions of the Tribunal
- Disposal of appeal and stay petition

Analysis:
The case involved the clearance of inputs and capital goods without immediate duty payment, as the duty was paid on a monthly basis as per Rule 8 of the Central Excise Rules. The Revenue contended that duty should have been paid at the time of removal, leading to the initiation of proceedings against the appellants for interest and penalty. However, the Tribunal referred to previous decisions, including the case of KLRF Textiles vs. CCE, Tirunelveli, and CCE Raigad vs. Savita Polymers Limited, establishing that the fortnightly payment facility applied to inputs and capital goods, not just final products. The Superintendent also dropped similar proceedings against the appellants. Consequently, the Tribunal found no grounds to uphold interest or penalty, setting them aside and disposing of the appeal and stay petition accordingly.