2007 (8) TMI 604 - AT - Central Excise

Tribunal grants appeal, dismantled machinery duty demand revoked under compounded levy scheme.

The Tribunal allowed the appeal against the duty demand on dismantled machinery under a compounded levy scheme. The Tribunal found no justification to ... Production capacity based duty - Demand Issues:Appeal against order of the commissioner (Appeals) regarding duty demand on dismantled machinery under compounded levy scheme.Analysis:The appellant was operating under a compounded levy scheme, and one of their stenter machines was not operational even before the introduction of the scheme. The appellant paid duty for the sealed stenter before seeking abatement, which was allowed by the Department. Subsequently, the appellant applied for dismantling the sealed stenter, issued reminders, and eventually dismantled and sold the stenter. A show cause notice was issued demanding duty for the dismantled stenter, covering a specific period. The Original Authority and the Commissioner (Appeals) confirmed the demand, citing dismantling without prior permission as the reason.Upon hearing both sides, the Tribunal noted that there was no evidence or allegation that the stenter was operational during the period for which the demand was raised. It was also acknowledged that the stenter was non-usable even before the compounded levy scheme began. Considering these facts, the Tribunal found no justification to uphold the demand for the period when the machinery was not in operation. Consequently, the appeal was allowed, providing consequential relief to the appellant.This judgment highlights the importance of considering the operational status of machinery and the circumstances surrounding its dismantling when determining duty demands under specific schemes. The Tribunal's decision focused on the lack of operation of the stenter during the relevant period and the pre-existing non-usable condition of the machinery, leading to the allowance of the appeal and relief for the appellant.