2013 (12) TMI 1141 - AT - Central Excise

Dutiability of the capital goods Capital goods cleared after their worn out as waste and scrap Waiver of Pre-deposit - Held that - The invoices raised are for the goods as waste and scrap - both the lower authorities have not considered and recorded any finding as regards waste and scrap is generated either by mechanical working on the capital goods or otherwise following UNION OF INDIA Versus HINDUSTAN ZINC LTD. 2007 (3) TMI 198 - HIGH COURT RAJASTHAN the appellant has made out a prima facie case for the waiver of the amount pre-deposits waived till the disposal Stay granted.

Summary

Issues:
Dutiability of capital goods cleared as waste and scrap.

Analysis:
The judgment pertains to a stay petition seeking the waiver of pre-deposit of amounts confirmed as Central Excise duty on capital goods cleared as waste and scrap from 2006-07 to Jan 2009. Both lower authorities held that the duty liability should have been deposited for waste and scraps. The key issue revolves around the dutiability of capital goods cleared after being worn out during use. The invoices were for goods categorized as waste and scrap. The Tribunal noted that the lower authorities failed to consider if waste and scrap were generated through mechanical working on the capital goods. Citing precedents, namely the judgment of the Hon'ble High Court of Rajasthan in Hindustan Zinc Limited and a Tribunal decision in the same case, the Tribunal found in favor of the appellant due to the absence of specific findings on the nature of waste and scrap generation.

The Tribunal, after hearing both sides and examining the records, concluded that the appellant had established a prima facie case for the waiver of pre-deposit. Consequently, the application for the waiver of pre-deposit was allowed, and the recovery of the amounts involved was stayed until the appeal's final disposal. The judgment was pronounced in court by Mr. M.V. Ravindran.