2013 (12) TMI 450 - AT - Central Excise

Capital goods written off but not cleared Duty liability - Held that - The capital goods and inputs which have written off by the assessees in their balance sheets were still lying in their factory and duty is payable on the clearance of goods/inputs/capital goods - as the goods have not cleared from the factory, duty is not payable. We, further find that whatever inputs cleared by the assessees have paid duty on the same capital goods/inputs Decided against Revenue.

Summary

Issues:
1. Appeal against dropping of demands confirmed in show cause notice by Ld. Commissioner (Appeals).

Analysis:
The judgment in this case pertains to an appeal by the Revenue against the dropping of demands confirmed in a show cause notice by the Ld. Commissioner (Appeals). The case involved the respondent writing off capital goods in their balance sheets for the period 1997-1998, 1998-1999, and 1999-2000, which had not been cleared from their factory. The Revenue contended that since the capital goods and inputs were written off in the books of accounts, the respondent was liable to pay duty, interest, and penalties. The adjudication resulted in the confirmation of demands as per the show cause notices, which were subsequently dropped by the Commissioner, leading the Revenue to appeal.

During the proceedings, the Additional Commissioner (AR) argued that the respondents should be held liable to pay duty, interest, and penalty due to the write-off of capital goods and inputs in their balance sheets. However, upon examination of the impugned order, it was found that the Ld. Commissioner had noted that the capital goods and inputs written off by the respondents were still present in their factory. The judgment highlighted that duty is payable upon the clearance of goods/inputs/capital goods, and since the goods had not been cleared from the factory, duty was deemed not payable. Additionally, it was observed that the respondents had already paid duty on the inputs that were cleared, further supporting the decision.

Ultimately, the Tribunal upheld the impugned order, stating that there was no merit in the Revenue's appeal. As a result, the appeal filed by the Revenue was dismissed, and the decision was pronounced in court on 26/04/2013.