2017 (2) TMI 1349 - AT - Central Excise

Demand of duty with interest and penalty - appellant had transferred Copper Ingots into their scraps account due to storage for a long time and thus become non-usable - demand on the ground that they had not applied for remission of duty on the said Copper ingots - Held that - there is no dispute of the fact that the manufactured Copper Ingots have been later used in the factory, by melting it in the furnace, repeating the process of manufacture of Copper Wire Rods - In absence of any evidence that these goods were removed form the factory or destroyed and not reused in the manufacture of Copper Wire Rods, application for remission of duty involved on Copper Ingots is not required - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order-in-appeal involving duty on transferred Copper Ingots, remission application requirement, intention to evade payment of duty, extended period of limitation.

Analysis:
The appeal was filed against the order-in-appeal passed by the Commissioner (Appeals) regarding the transfer of Copper Ingots valued at a specific amount into the 'scraps account' due to long-term storage, leading to an allegation of recoverable duty. The appellant contended that the Copper Ingots were eventually used in the manufacture of Copper Wire Rods after being transferred to the scrap account due to a clerical mistake. The appellant argued that since the Copper Ingots were not lost due to natural causes and were used in the manufacturing process, there was no need for a remission application under Rule 21 of the CER, 2002. It was further emphasized that there was no evidence of duty evasion or removal of goods without payment. The appellant also asserted that there was no intention to evade payment of duty, thus challenging the applicability of the extended period of limitation.

The Revenue, represented by the Ld. AR, supported the findings of the Commissioner (Appeals) regarding the duty demand on the transferred Copper Ingots. However, the Tribunal, after considering the facts and submissions, found that the demand notice was based on the appellant's failure to apply for remission of duty on the Copper Ingots when they were transferred to the scrap account. It was noted that the Copper Ingots were later used in the manufacturing process after being melted in the furnace, as evidenced by the flow chart provided. The Tribunal concluded that since there was no evidence of removal of goods from the factory or their destruction without reuse in the manufacturing process, there was no requirement for a remission application. Consequently, the Tribunal set aside the impugned order and allowed the appeal with any consequential relief as per the law.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the duty demand was not justified due to the subsequent use of the Copper Ingots in the manufacturing process. The decision highlighted the lack of evidence supporting duty evasion or non-reuse of the goods, leading to the setting aside of the demand and allowing the appeal.