Duty on scrap from capital goods failed where no credit was admissible on pre-1994 acquisitions and Revenue led no contrary evidence.

Duty on waste and scrap of capital goods could not be confirmed merely on the assumption that credit had been taken on the original capital goods. The assessee produced a detailed, verifiable list of the capital goods, their acquisition dates and disposal, and the record showed that the goods were acquired before 1-3-1994, when credit was not admissible on such capital goods. As the Revenue produced no contrary evidence to displace the documentary material, the demand was held not sustainable and was set aside in favour of the assessee.

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Issues: Whether duty could be confirmed on waste and scrap of capital goods on the footing that credit had been taken on those capital goods, when the assessee claimed that no credit had been availed and the capital goods were acquired before credit became available.

Analysis: The assessee produced a detailed list showing the capital goods, the dates of acquisition and disposal, and the record was verified by the Revenue. The evidence showed that the capital goods had been acquired prior to 1-3-1994, when no credit was admissible on such capital goods. No contrary evidence was produced by the Revenue to dislodge the documentary material supporting the assessee's stand.

Conclusion: The demand was not sustainable and was set aside in favour of the assessee.

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