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TMI Blog2002 (5) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... ocate of the Applicants at the outset made a fresh disclosure of duty liability of Rs. 1,71,833/- i.e. out of Rs. 7,64,136/-, he was admitting Rs. 6,42,842/- leaving out a balance of Rs. 1,21,294/- not being admitted for the reason that the sale of capital goods were made after there was no credit lying in balance. Therefore, the question of demand for credit on capital goods does not arise taking into consideration the fact that there was no credit passed on to the buyer. The ld. Advocate further submitted that the report of the Commissioner (Investigation) refers to Rule 57-S(2)(b), which he claimed is incorrect because Rule 57-S(2)(b) comes into play only when the capital goods were removed from the factory and in the present case, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of 57U of the Rules read with proviso to Section 11A(1) of the Act, and under Rule 57AH of the Central Excise Rules, 1944. 6. The Revenue further submitted that it objects to grant of immunity to the Applicant because it was a clandestine removal. 7. The Commission has gone through the case records and the submissions made by the ld. Consultant of the Applicant. 8. The Commission observed that at the first instance the Applicant disclosed Rs. 4,47,767/- as against Rs. 7,64,136/- demanded in the show cause notice, as an additional amount of duty accepted as payable and accordingly by an Interim Order No. 1/2001 of the Commission, the applications were allowed to be proceeded with under sub-section (1) of Section 32F of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as against the whole demand of Rs. 7,64,136/- in the said show cause notice. 13. The Commission has gone through the case records and the submissions of the Applicant. 14. The Applicant has admitted a total duty liability of Rs. 6,42,842/-. He has not admitted the duty liability of Rs. 1,21,294/-. The show cause notice demanded duty of Rs. 7,64,136/-. The reasons for not admitting a duty of Rs. 1,21,294/- by the Applicant is that Rule 57-S(2)(b) of Central Excise Rules, 1944 is not applicable in their case since this rule will come into play only when the capital goods were removed from the factory. In this case, capital goods were not removed from the factory. The entire factory along with capital goods were sold on outright basis. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital goods under sub-rule (2) of Rule 57-S. The capital goods can be removed without being used from the factory for home consumption on payment of duty or for export on payment of duty of excise. Again the said capital goods can be removed after being used in the factory for home consumption on payment of duty of excise or for export under rebate on payment of duty of excise but when such removal takes place after being used in the factory, the assessee is allowed a deduction up to 2.5 per cent of credit taken for each quarter of a year of use or fraction thereof from the date of availing credit under Rule 57Q. Where any capital goods are sold as waste and scrap, the manufacturer shall pay duty leviable on such waste and scrap. 17. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that case, there could be sale of the input and capital goods in which the assessee had already utilised Modvat credit. 19. Sub-rule (6) of the said Rule 57-S further stipulates transfer of unutilised credit under sub-rule (5) shall be allowed only if stock of inputs as such or any process if any is also transferred along with the factory to the new site or ownership and the stock of such input is duly accounted for to the satisfaction of the Commissioner. This sub-rule though makes reference to sub-rule (5) is confined to transfer to stock of inputs and not to transfer of stock of capital goods, whereas sub-rule (5) speaks about credit of capital goods lying un-utilised. 20. The Commission is, therefore, of the opinion that since t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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