TaxTMI 
TaxTMI 
2006 (7) TMI 531
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.... 8455.90. The said declaration was not accepted by the Assistant Commissioner, who modified the same with directions to the appellant to pay duty on the said used capital goods under Rule 57-S(2)(b). However, it is seen that the said modification of the classification declaration was neither challenged by the appellant nor obeyed. As such, the appellant cleared the said used rolls as waste and scrap on payment of duty leviable on waste and scrap. 2. In view of the above backdrop, they were issued four show cause notices raising differential demands of duties on the alleged grounds that the said rolls should have been cleared in terms of the provisions of Rule 57-S(2)(b).Accordingly, notices raised differential demands totally amounting to Rs. 7,88,56,590.23 (Rupees seven crores eighty-eight lakhs fifty-six thousand five hundred ninety and twenty-three paise). The said demands stand confirmed by the Commissioner vide his impugned order, who also imposed personal penalty of Rs. 10,00,000/- (Rupees ten lakhs only) upon the appellant. Hence the present appeal. 2. We have heard Shri B.L. Narasimhan, ld. Advocate appearing for the appellant and Shri V. Valte Ld SDR appear....
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....d maintenance of the Rolls. The rolls which are broken during the process of rolling are also scrapped of and sent to the scrap yards for which a register is maintained. After the same are declared scrap, they are sent to the material recovery department or disposal yarn as scrap accompanied by a dispatch advice for which proper records are also being maintained. However he fairly agreed that such elaborate documentary evidence, samples of which have now been attached to the appeal, were not submitted before the adjudicating authority. He also agreed that description of the rolls in the sale invoices was only as used/rejected rolls. As such it becomes all the more important for the appellant to prove beyond doubt that used and rejected rolls were not sold as second hand goods to their buyers but as waste and scrap. This could be proved by the appellant from the documentary records maintaines by them for the said purpose or from the buyers, who have purchased the same and the use to which the same has been put to. Admittedly no efforts have been made by the appellant to substantiate their claim of the said capital goods having become waste and scrap. As such, we are of the view that....
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....oved them without observing the procedure as laid down under Rule 57-S(2)(b) of 'the Rules'. Moreover the party also failed to produce any supporting documentary evidence regarding the period/duration of the use of such CI/steel rolls before the sale/removal of the same, as 'waste and scrap', as to extend the abatement under Rule 57-S(2)(b) 'the rules'." It is clear from the above that the Demand has been made merely because the assessee failed to produce any documentary evidence regarding availment of correct Modvat credit on the rolls in question cleared. This was an impossibility since the appellant's contention was that the rolls in question had been in use for several years and at the time when they were received, Modvat credit was not available on the capital goods. The absence of any evidence about taking of credit on these items or removal of modvated capital goods by the appellant remains admitted all through the show cause notices and the impugned order. A demand cannot be raised without evidence. 8. In fact Revenue is proceeding on a mere presumption. That too quite unwarranted. Modvat credit on capital goods is a recent phenomenon (1994). It does not follow t....
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..../removal of the same as waste and scrap. During the course of arguments before us, the learned Advocate has fairly conceded that there exists an elaborate system of constitution of a Committee for declaring the various capital goods as waste and scrap and such a declaration is obtained from the head of the specific department dealing with the grooving and maintenance of the Rolls. The rolls which are broken during the process of rolling are also scrapped of and sent to the scrap yards for which a register is maintained. After the same are declared scrap, they are sent to the material recovery department or disposal yard as scrap accompanied by a dispatch advice, for which proper records are also being maintained. However, he fairly agreed that such elaborate documentary evidence, samples of which have now been attached to the appeal, were not submitted before the adjudicating authority. He also agreed that description of the rolls in the sale invoices was only as used/rejected rolls. As such, it becomes all the more important for the appellant to prove beyond doubt that used and rejected rolls were not sold as second hand goods to their buyers but as waste and scrap. Th....