Old and used press felt held non-dutiable; clearance was not treated as removal of capital goods as such.

Clearance of old and used press felt was treated as non-dutiable, because the material was evidenced by invoices as used felt rather than scrap, and its removal was not regarded as clearance of capital goods as such. The Tribunal relied on prior decisions that sale of used machinery or similar used goods does not attract duty on the footing of capital goods clearance. It also stated that a Board circular cannot override the statutory position. On that basis, the duty demand was held unsustainable and the assessee's position was accepted.

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Issues: Whether duty was payable on clearance of old and used press felt, and whether such clearance could be treated as removal of capital goods as such.

Analysis: The clearance was shown by the sample invoices to be of old and used press felt and not scrap, though the record also indicated that worn-out felt ultimately became scrap and was disposed of from the scrap yard. The Tribunal noted that clearance of old and used press felt was not dutiable and relied on prior decisions holding that sale of used machinery or similar used goods does not amount to clearance of capital goods as such. It was further held that a Board circular cannot override the statutory position.

Conclusion: Duty was not payable on the clearance of old and used press felt, and the demand was unsustainable. The appeal was rejected, in favour of the assessee.

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