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2007 (3) TMI 198 - HC - Central ExciseDepartment has failed to prove that the assessee has availed the benefit of modvat credit on the capital goods which had been cleared as waste and scrap held that no duty is payable on removal of its waste and scrap from the factory - Since impugned decision is founded on findings of fact which has not been shown to be perverse or based on no material, no question of law arises for consideration in this appeal - Accordingly, the appeal is dismissed.
Issues:
Interpretation of Rule 57S (2)(C) of the Rules, 1944 regarding demand and penalty on waste and scrap of capital goods cleared during a specific period. Analysis: The appellant raised a substantial question of law regarding the decision of the CESTAT to drop the demand and penalty on waste and scrap of capital goods cleared during a particular period. The question revolved around whether the Tribunal was correct in dropping the demand and penalty when the provisions of Rule 57S (2)(C) of the Rules, 1944 were applicable. The appellant argued that the department failed to prove that the assessee had availed the benefit of modvat credit on the capital goods cleared as waste and scrap. It was highlighted that the assessee was working under the Self Removal Procedure Scheme, and the department did not have supervision or control over the clearances made by the assessee. The Commissioner (Appeals) and the Tribunal both found that there was no evidence to demonstrate that the capital goods from which waste scrap was removed had been claimed for modvat credit by the assessee. The absence of proof regarding the availing of modvat credit by the manufacturer in relation to the capital goods in question led to the conclusion that no duty was payable on the removal of waste and scrap. The appellate authorities concluded that since the manufacturer's availing of modvat credit was not established, the assessee was not liable to pay duty on the scrap and waste of those capital goods. The decision was based on factual findings that were not shown to be erroneous or lacking in evidence, thus precluding the need for a legal question to be addressed in the appeal. Ultimately, the appeal was dismissed based on the established facts and the absence of legal grounds for further consideration.
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