9911796707
TMI Blog2006 (7) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the present appeal relates to clearance of such capital goods i.e. steel rolls by the appellant as used/broken/scrapped cast Iron/Steel Rolls and by classifying the same as waste and scrap under Heading 8455.90 after payment of duty at the rate of 15% ad valorem. It is seen that before clearing the said steel rolls, appellant filed a classification declaration under Rule 173B of Central Excise Rules classifying the said used and scrap iron/steel rolls under Heading 8455.90. The said declaration was not accepted by the Assistant Commissioner, who modified the same with directions to the appellant to pay duty on the said used capital goods under Rule 57-S(2)(b). However, it is seen that the said modification of the classification declara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess than the amount of credit that has been allowed in respect of such capital goods under Rule 57Q; (b) Where capital goods are 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, such duty of excise shall be calculated by allowing deduction of 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; and (c) Where capital goods are sold as waste and scrap, the manufacturer shall pay the duty leviable on such waste and scrap". As is clear from the reading of the above Rules where capital goods are removed after being used in a factory on payment of duty of excise, such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority. He also agreed that description of the rolls in the sale invoices was only as used/rejected rolls. As such it becomes all the more important for the appellant to prove beyond doubt that used and rejected rolls were not sold as second hand goods to their buyers but as waste and scrap. This could be proved by the appellant from the documentary records maintaines by them for the said purpose or from the buyers, who have purchased the same and the use to which the same has been put to. Admittedly no efforts have been made by the appellant to substantiate their claim of the said capital goods having become waste and scrap. As such, we are of the view that the matter need to be remanded back to the adjudicating authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demned and it is such condemned rolls which were cleared as scrap. The assessee is a several decade old steel maker. Therefore, it is normal that, from time to time, used rolls were condemned as unfit for continued use and they are cleared as waste and scrap. Therefore, the appellant's contention that the waste in question arose on account of scraped rolls merited acceptance, unless there was evidence to the contrary. There is no such evidence in the present case. 7. That Revenue's case is bereft of any positive evidence is clear from the order itself. In Para 5.3 of the order, the Commissioner observed as under : "They did not produce any documentary evidence regarding the availment of correct amount of Modvat credit on such CI/stee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. 9. It is well settled that a notice should bring out the charge and the evidence upon which the charge is based. In the present case, the charge is made because the appellant has failed to show as to when the scrapped rolls were purchased and what was the credit taken. This is no way of raising or sustaining a tax demand. That the appellant has not shown when the original rolls were received in the factory does not mean that Modvat credit was taken on them at the time of original receipt. In fact, it was most unlikely that credit would have been taken on the old and scrapped rolls since the Modvat credit on capital goods became available only from 1994. Thus, the Revenue's presumption of taking of Modvat credit was not warranted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borate system of constitution of a Committee for declaring the various capital goods as waste and scrap and such a declaration is obtained from the head of the specific department dealing with the grooving and maintenance of the Rolls. The rolls which are broken during the process of rolling are also scrapped of and sent to the scrap yards for which a register is maintained. After the same are declared scrap, they are sent to the material recovery department or disposal yard as scrap accompanied by a dispatch advice, for which proper records are also being maintained. However, he fairly agreed that such elaborate documentary evidence, samples of which have now been attached to the appeal, were not submitted before the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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