2012 (4) TMI 508

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....acturer of industrial gases. During the period 2005 to 2009, the appellant sold waste and scrap worth Rs. 38,56,540/- but did not pay any excise duty. 3. The Department was of the view that since the appellant has availed the benefit of Modvat credit in respect of the capital goods under Rule 3(5A) of the Cenvat Credit Rules, 2004, the appellant was supposed to pay the excise duty on waste and scrap sold by the appellant. Accordingly, show cause notice was issued to the appellant which was contested. The jurisdictional Joint Commissioner, Allahabad after due hearing took the view that Rule 3(5A) of Cenvat Credit Rules, 2004 was applicable to the appellant and confirmed the duty demand of Rs. 5,62,887/- along with interest. He also i....

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....facturer shall pay an amount equal to the duty leviable on transaction value. The above capital goods of MS scrap are mostly oxygen plant scrap. It was verbally informed to audit, that plant machines of oxygen plant are normally changed after 7 - 8 years of use & replaced by new one. Hence all the above scraps of capital goods have been generated out of use of modvated capital goods. There is no evidence on sale invoice about the non-modvated nature of capital goods scrap. Party is therefore liable to pay the duty of Rs. 5,62,887/- = (Rs. 58,187/- + Rs. 5,04,700/-) on sale of capital goods scrap, along with interest, without any delay." 6. In view of the above, the learned A.R. submits that from the above observation in audit rep....