Tribunal rules in favor of appellant, setting aside duty demand on capital goods, citing lack of evidence and time-barred claim.

The Tribunal set aside the demand for duty on the sale of capital goods without reversing CENVAT credit, ruling in favor of the appellant. The decision highlighted the lack of evidence supporting the Revenue's claims, the time-barred nature of the demand, and the absence of suppression of facts by the appellant. The appeal was allowed based on the unsustainable nature of the demand both on merit and limitation grounds.

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Issues:
- Appeal against rejection of appeal by Commissioner (Appeals) regarding demand of duty on sale of capital goods without reversing CENVAT credit.
- Sustainability of demand under Rule 3(5A) of CCR, 2004 on transaction value.
- Appellant's claim of sale of capital goods after use for more than 15 years.
- Availability of records for availing CENVAT credit and reversal.
- Time-barred nature of the demand.
- Allegation of suppression of fact to evade payment of duty.

Analysis:
The appeal was filed against the rejection of the appellant's appeal by the Commissioner (Appeals) concerning the demand of duty on the sale of capital goods without reversing the CENVAT credit. The appellant, engaged in manufacturing Gelatin, sold capital goods like Spectrophotometer, turbine set, and fork lifts during the period 2010-11 to 2011-12 without reversing the proportionate CENVAT credit or paying the applicable Central Excise duty. The Original Authority confirmed the demand of &8377; 2,86,303/- along with interest and imposed a penalty. The appellant contended that the demand was unsustainable as the goods were sold after use for more than 15 years, and the question of reversing credit or demanding duty did not arise. The appellant also argued that the demand was time-barred and not based on suppression of facts to evade duty payment.

The Revenue raised the demand under Rule 3(5A) of the CCR, 2004 on the transaction value of the capital goods based on invoices produced by the appellant. However, it was found that the goods were not sold as waste or scrap but after use. The Revenue failed to establish that the appellant had availed CENVAT credit on these goods, which needed to be reversed upon sale. The demand was deemed to be based on assumptions and presumptions. Moreover, as the goods were procured over 10 years ago, the appellant did not possess records beyond 5 years, making the demand appear time-barred. The appellant voluntarily provided documents during the audit, indicating no intent to evade duty payment. The Tribunal held that the impugned order was unsustainable on both merit and limitation grounds, ultimately allowing the appeal of the appellant.

In conclusion, the Tribunal set aside the impugned order, emphasizing that the demand for duty on the sale of capital goods without reversing CENVAT credit was not sustainable. The decision was based on the lack of evidence supporting the Revenue's claims and the time-barred nature of the demand, as well as the absence of suppression of facts by the appellant.

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