2013 (8) TMI 307 - AT - Central Excise

Limitation - Respondents are engaged in manufacture of CTD Bar, MS Angle, MS Channel, MS Round, MS Square etc - Sale of Roll scrap, a capital goods are cleared as, waste and scrap assessee is required to pay duty on transaction value under Rule 3 (5A) of the Cenvat Credit Rules - A Show Cause Notice dated 23.03.2009 was issued to the respondents demanding duty Held that - Audit team visited M/s. Ramesh Industries, Raipur a sister concerned of the Appellant unit and they had knowledge of this facts right from the date of Audit in M/s. Ramesh industries, Raipur i.e. from 2006, but the department failed to make any investigation against appellants unit Appeal of revenue rejected Decided against the Revenue.

Summary

Issues:
1. Demand of duty on sale of Roll scrap.
2. Commissioner (Appeal) decision on merit and time bar.
3. Previous Tribunal decisions on similar cases.

Analysis:
1. The appeal was filed by the Commissioner Central Excise against the Order in Appeal passed by the Commissioner Central Excise (Appeal) regarding the demand of duty on the sale of Roll scrap by the respondents, M/s Ramesh Steel Industries, who are engaged in manufacturing various products under chapter 72 of the Central Excise Tariff Act, 1985. The issue arose when the respondents showed income from the sale of Roll scrap in their balance sheet under the schedule 'K', leading to a Show Cause Notice demanding duty on the said amount. The Adjudicating authority confirmed the duty, but the Commissioner (Appeal) set aside the order, prompting the Revenue to challenge the decision before the Tribunal.

2. The Appellant argued that the income shown in the balance sheet is a statutory document filed by the respondent under the Companies Act, justifying the duty confirmation. However, the Commissioner (Appeal) ruled in favor of the respondent, stating that the income mentioned in the balance sheet was not received on account of the sale of scrap. The Advocate for the assessee highlighted a previous case where a similar Show Cause Notice was confirmed against them, but the Tribunal dismissed the Revenue appeal. In the present case, the Commissioner (Appeal) dropped the demand on merit and limitation grounds, citing the lack of investigation by the department despite prior knowledge of similar facts.

3. The Tribunal, after considering both sides, noted that a similar case involving the same issue had been decided in favor of the respondent in the past, and the Revenue's appeal was rejected. The Commissioner (Appeal) in the present case also ruled in favor of the respondent on the grounds of merit and limitation, referencing the previous case's findings. The Tribunal upheld the Commissioner (Appeal)'s decision, rejecting the Revenue's appeal based on the Show Cause Notice issued in 2009 for the period 2006-2007, thereby settling the matter in favor of the respondent.