2011 (1) TMI 1000 - AT - Central Excise

Sale of scrap of old and use capital goods - demand of duty, interest and penalty - Ld. advocate for the appellants submits that the waste and scrap cleared by them is generated from the non-modvatable capital goods procured by them - Held that - Matter is remanded back to original authority to examine whether waste and scrap cleared by the appellants is a waste and scrap of non-modvatable goods or not. The adjudicating authority, after satisfying by the documents produced by the appellants in support of their defence, shall pass a fresh order.

Summary

Issues:
1. Confirmation of demand of duty, interest, and penalty against the sale of scrap of old and used capital goods.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Mumbai dealt with the confirmation of a demand of duty, interest, and penalty against the sale of scrap of old and used capital goods. The appellants, who were manufacturers of sugar, procured capital goods for their factory and some were cleared through auction without paying excise duty after becoming used and scrap. The lower authorities confirmed the demand, leading the appellants to appeal. The advocate for the appellants argued that the waste and scrap cleared were generated from non-modvatable capital goods, a fact brought to the attention of the adjudicating authority. However, the authority confirmed the demand without considering this crucial information, prompting the appeal.

The Tribunal, after hearing the submissions, found merit in the appellant's argument. It directed the matter to be reconsidered by the adjudicating authority to determine whether the waste and scrap cleared were indeed from non-modvatable goods. The adjudicating authority was instructed to examine the documents provided by the appellants in support of their defense and then pass a fresh order based on their findings. The Tribunal emphasized the need for a thorough examination and a fair opportunity for the appellants to present their case before the adjudicating authority.

In conclusion, the judgment highlighted the importance of properly considering all relevant factors before confirming a demand for duty, interest, and penalty. It stressed the need for a detailed examination of the nature of the waste and scrap in question and the supporting documents provided by the appellants. The decision to remand the matter back to the adjudicating authority for a fresh order underscored the principles of fairness and thorough evaluation in such cases.