2010 (4) TMI 468 - AT - Central Excise

Valuation - Capital Goods - appellants have paid duty on the transaction value on the capital goods at the time of clearance of the same after about ten years of use. Held that - duty is to paid on their depreciated value calculation @ of 2.5% per quarter.

Summary

Issues:
1. Condonation of delay in filing the appeal and waiver of pre-deposit requirement.
2. Reversal of credit on used capital goods due to delayed duty payment.
3. Calculation of duty on depreciated value of capital goods at 2.5% per quarter.
4. Refund claim and implications of not filing it.

Analysis:
1. The judgment addresses the issue of condonation of delay in filing the appeal and waiver of the pre-deposit requirement. The tribunal, after considering the reasons stated in the miscellaneous application, condoned the delay of 30 days in filing the appeal. Additionally, the requirement of pre-deposit was waived with the consent of both parties. The appeal was also taken up for immediate hearing and disposal on the same day.

2. The next issue pertains to the reversal of credit on used capital goods due to delayed duty payment. The appellants had paid duty on the transaction value of the capital goods after approximately ten years of use. The Department sought reversal of the credit initially taken. The tribunal considered the submissions from both sides, where the appellants' counsel cited precedents where clearance of used capital goods was allowed with depreciation of 2.5% per quarter. The tribunal held that duty should be paid only on the depreciated value of the capital goods and ordered a re-calculation of the duty amount payable.

3. The calculation of duty on the depreciated value of capital goods at a rate of 2.5% per quarter was a crucial aspect of the judgment. Relying on earlier decisions of the Tribunal and specific cases like CCE, Chandigarh v. Raghav Alloys (P) Ltd., the tribunal determined that the depreciation should indeed be calculated at the rate of 2.5% per quarter. This calculation method was applied in setting aside the impugned order and remanding the matter for re-calculation of the duty amount payable.

4. Lastly, the judgment addressed the issue of the refund claim and its implications. It was noted that the appellants had not filed any refund claim, and the entire proceeding stemmed from a demand notice by the Department. The tribunal ruled that in the event of any extra amount payable by the appellants after re-calculation, they must pay it immediately. However, if the payment already made exceeds the re-calculated amount, they would not be entitled to any refund due to not filing a refund claim. The appeal was allowed based on these terms, with clear instructions provided for the parties involved.