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TMI Blog2010 (12) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... rging duty in respect of such capital goods if the same are removed into DTA, as they are neither the excisable goods acquired free of Central Excise Duty nor the goods imported free of customs duty nor the finished goods manufactured in the EOU - The appeal is allowed - E/539 of 2005 - 875/2010-EX(PB) - Dated:- 2-12-2010 - Shri Justice R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ. Shri B.L. Narasimhan, Advocate for the appellant. Shri R.K. Verma, Authorized Representative (DR) for the Respondent. Per. Rakesh Kumar :- The facts leading to this appeal are, in brief, as under. 1.1 The appellant are manufacturer of cotton yarn chargeable to Central Excise Duty under Chapter heading 5205 of the Central Excise Tariff. Till 1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice was adjudicated by the Deputy Commissioner vide order-in-original dated 7/7/98 by which the duty demand of Rs. 9,50,125/- was confirmed against the appellant and penalty of Rs. 2,00,000/- was imposed on them under Rule 9 (2) Erstwhile Rule 173Q (1) of the Central Excise Rules, 1944. On appeal to Commissioner (Appeals) against the Deputy Commissioners order, the Commissioner (Appeals) vide order-in-appeal No. GWL/703/2004 dated30th November 2004upheld the Deputy Commissioners order and rejected the appeal. It is against this order of the Commissioner (Appeals), that the present appeal has been filed. 2. Heard both the sides. 2.1 Shri B.L. Narasimhan, Advocate, the learned Counsel for the appellant, pleaded that from the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to reverse the Modvat credit in terms of Rule 57S of Central Excise Rules, 1944 at the time of removal of the capital goods as such, irrespective of the fact as to whether at the time of removal the unit was functioning as DTA unit or it had converted into EOU and that there was no requirement for the appellant to pay duty on removal on such modvated capital goods in cash. In view of this, it was pleaded that the impugned order upholding the duty demand and imposition of penalty is not correct. 2.2 Shri R.K. Verma, the learned Departmental Representative, defended the impugned order by reiterating the Commissioner (Appeals)s findings and emphasized that the Modvat credit balance in the account of the DTA unit had lapsed upon its con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and capital goods under Notification No. 13/81-CUS dated9/2/81. However, on removal of indigenous inputs or capital goods as such, Central Excise Duty was liable to be paid and on removal of imported input or capital goods as such, the customs duty was liable to be paid. On removal of finished goods manufactured by any EOU into DTA, the duty was chargeable in terms of proviso to Section 3 (1) of Central Excise Act, 1944 which was the aggregate the duties of the customs chargeable on the goods if imported into India. The capital goods which had been received by the appellant unit prior to 12/6/95, were duty paid capital goods and are not the capital goods which had been acquired free of Central Excise Duty. There is no provision for charging ..... X X X X Extracts X X X X X X X X Extracts X X X X
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