2014 (1) TMI 471 - AT - Central Excise

Capital goods waste and scrap generated in the casting foundry cleared without payment of duty - Waiver of pre-deposit Held that - The appellant has discharged the duty liability on turning scrap and the scrap which generated in the cast iron foundry - Prima-facie, waste and scrap on which the duty has been sought by the adjudicating authority is nothing but waste, which has generated on dismantling and cutting the capital goods Following M/s. Grasim Industries Ltd. Versus Union of India 2011 (10) TMI 2 - SUPREME COURT OF INDIA - the appellant has made out a strong prima facie case in their favour Pre-deposits waived till the disposal Stay granted.

Summary

Issues:
Waiver of amount, interest, and penalty related to differential Cenvat credit for cleared capital goods and waste in casting foundry.

---

Analysis:
The judgment pertains to a stay petition seeking the waiver of an amount, interest, and penalty imposed on the appellant for the clearance of used capital goods, waste, and scrap generated in a casting foundry without discharging duty liability. The adjudicating authority confirmed the amounts as differential Cenvat credit payable, along with interest and equal penalty. Upon review, the tribunal found that the appellant had cleared various items like cables, MS scrap, machinery parts, bearings, motors, ferrous and non-ferrous parts, copper tubes, spares, and scraps. The tribunal noted that the appellant had discharged duty liability on certain items, indicating a proactive approach towards compliance. The tribunal, relying on legal precedents including the judgment of the Hon'ble Supreme Court in Grasim Industries Limited and a tribunal judgment in the case of HPCL, concluded that the waste and scrap in question were by-products of dismantling and cutting capital goods, not subject to duty. As a result, the tribunal held that the appellant had established a strong prima facie case for the waiver of the pre-deposit amounts. Consequently, the tribunal allowed the application for waiver and stayed the recovery of the balance amounts until the appeal's disposal.

---

This judgment showcases the tribunal's meticulous examination of the facts and legal principles concerning the waiver of amounts related to Cenvat credit for cleared capital goods and waste. The tribunal's analysis focused on the nature of the items cleared by the appellant, distinguishing between waste generated during the dismantling process and goods subject to duty liability. By referencing relevant legal precedents, the tribunal provided a well-reasoned decision supporting the appellant's contention that the waste and scrap in question did not attract duty payment. The tribunal's reliance on established case law, such as the judgment in Grasim Industries Limited and the tribunal's own ruling in the HPCL case, demonstrates a thorough consideration of legal principles to arrive at a just outcome. Overall, the judgment highlights the importance of a comprehensive legal analysis in matters involving duty liability and the waiver of pre-deposit amounts, ensuring a fair and equitable resolution based on established legal interpretations.