2017 (12) TMI 501 - AT - Central Excise

Clearance of goods without payment of duty - Held that - the issue to be addressed is whether the appellant had availed credit on those capital goods, that became scrap and sold during the relevant period, without payment of duty. Ld. Chartered Accountant for the appellant categorically makes a claim that no duty is required to be paid on the MS Scrap as the same did not arise out of capital goods on which credit was availed by them. It is his contention that the said scrap did arise on dismantling of the old plant and machinery installed in their premises since 1968 but before April 1994 - Appeal allowed by way of remand.

Summary

Issues:
- Appeal against order-in-appeal passed by Commissioner of Central Excise
- Allegation of clearing MS Scrap without payment of duty
- Demand notice for recovery of credit, interest, and penalty
- Appeal before Ld. Commissioner (Appeals) partly allowed
- Contention of appellant regarding non-availment of credit on capital goods
- Request for remand to adjudicating authority for producing evidence
- Claim that MS Scrap did not arise out of capital goods on which credit was availed
- Order setting aside and appeal allowed by way of remand

Analysis:
The appeal was filed against the order-in-appeal passed by the Commissioner of Central Excise, Surat, regarding the clearance of MS Scrap without payment of duty. The appellant argued that the scrap sold by them did not arise out of capital goods on which credit was availed. The Ld. Commissioner (Appeals) partly allowed the appeal but upheld a portion of the demand. The appellant's Chartered Accountant contended that they could prove the non-availment of credit on the capital goods which became scrap and were sold during the relevant period by presenting evidence. The appellant requested a remand to the adjudicating authority for this purpose.

The main issue to be addressed was whether the appellant had availed credit on the capital goods that became scrap and were sold without duty payment. The Chartered Accountant claimed that no duty was required on the MS Scrap as it did not arise from capital goods on which credit was availed. He stated that the scrap originated from dismantling old plant and machinery installed before April 1994. Consequently, the order was set aside, and the appeal was allowed by way of remand to the adjudicating authority to verify the appellant's claim regarding the origin of the MS scrap from dismantling capital goods procured before 01.04.1994 without availing cenvat credit. The Ld. Commissioner (Appeals) had observed the appellant's failure to establish this connection.

In conclusion, the judgment focused on the crucial issue of whether duty payment was required on MS Scrap that allegedly did not arise from capital goods on which credit was availed. The decision allowed the appeal by remanding the matter for further verification of the appellant's claim, emphasizing the need for evidence to support their contention.