2004 (6) TMI 150 - AT - Central Excise

Cenvat/Modvat - Transfer of inputs - sale of a power unit - Removal of goods - HELD THAT - The appellant had made a necessary request for amendment in the Central Excise registration, which was allowed by the Revenue authorities. On consideration of the entire matter the Tribunal held that capital goods were physically not removed from the factory. The capital goods were still used in the manufacture of final product in the same factory and the same were covered under the description of 'capital goods'. The Tribunal applied the ratio rendered in the case of Jamna Auto Industries Ltd. 2000 (9) TMI 146 - CEGAT, NEW DELHI and allowed the assessee's appeal. We are of the considered opinion that even in this case, the capital goods were not physically removed from the factory. Mere amendment in the approved plan cannot be considered as removal of capital goods from the factory, therefore, both the judgments are not distinguishable and are required to be applied to the facts of the case. The citation referred by SDR is clearly distinguishable and not applicable to the facts of this case. Respectfully following the ratio of the above cited judgments, the impugned order is set aside and appeal is allowed with consequential relief, if any. No separate judgment was delivered by the judges in this case.

Summary

Issues Involved:
The appeal arises from confirming duty demand by invoking specific provisions of Central Excise Rules regarding the sale of a power unit to M/s. Tata Electric Company and the subsequent duty implications.

Details of the Judgment:

1. The appellant sold the power unit to M/s. Tata Electric Company, raising the question of whether duty is payable on the sale of capital goods under Rule 57S(1)(ii) of Central Excise Rules.

2. The appellant's counsel argued that the sale of the entire power plant does not constitute removal of goods from the factory, citing precedents and emphasizing that the approved ground plan was not amended at the time of sale.

3. The Department contended that if the power plant was outside the factory unit, it should be deemed as removal, requiring reversal of Modvat credit or payment of duty.

4. The Tribunal found merit in the appellant's argument that the demands cannot be raised against them due to the sale of the entire power plant to M/s. Tata Electric Company, but refrained from making a conclusive decision on this point.

5. Referring to previous judgments involving similar cases, the Tribunal concluded that the sale of capital goods does not necessarily constitute their removal from the factory, and mere amendment in the approved plan does not amount to removal of capital goods. The Tribunal set aside the duty demand and allowed the appeal based on the established legal principles and precedents.

Separate Judgment Delivered:
No separate judgment was delivered by the judges in this case.