TaxTMI 
TaxTMI 
2002 (10) TMI 128
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.... paid duty only on the scrap instead of reversing the entire duty taken. It was alleged that this mis-declaration on the part of the appellants appeared to be with an intention to evade payment of appropriate duty on the same and appeared to have suppressed regarding disposal of inputs demand of appropriate credit taken and thereby proviso to Rule 57-I(1)(ii) of C.E. Rules, 1944 read with proviso to Section 11A(1) of C.E. duty was invoked for demand of duty for extended period of five years in both these appeals, besides invoking penal provisions. 2.The appellants submission in this matter had been that - (a) the credit has been availed on receipt of the components based on duty paying documents. (b) Necessary declaration had been filed and credit had been availed only after the receipt of the components. (c) The components were eligible inputs in the manufacture of declared final products viz. Motor vehicle chassis falling under Chapter 87. (d) The credit availed had been used for clearance of chassis falli....
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....e appellants that the various explanations will give an idea as to how there had been rejections and why at times there are also obsolete items rejected and cleared as waste and scrap; that they were engaged in manufacture of chassis which required 3,000 to 4,000 components (both sub-assemblies and major assemblies) and more than 60% of components/assemblies are bought out finished, these components/ assemblies at times suffer duty in the hands of the manufacturer and at times are received from exempted units. All these components/assembly have been received and duly accounted. Wherever input duty had been paid for such input, credit had been availed. Only then components that have become obsolete or in the course of manufacture found to be defective are rejected/scrapped. Such components have been sold as waste and scrap of ferrous and non-ferrous metals. There had been payment of duty on waste and scrap. 4.They have filed necessary RT 12 returns with the department enclosing relevant invoices. RT 12 returns are being filed not only to comply with the statutory requirement but also for the department to find out from such returns if there had been any infraction as regards paym....
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.... the insertion Notification No. 8/93 dated 2-11-93 is shown within the brackets and it is apparent from these amendments that even after an input is scrapped as such, once it is declared as it has become waste in relation to manufacture of the final product, they shall be considered as waste arising in the course of manufacture of the final product. Therefore, it cannot be said that in respect of categories of Sl. No. 2 to 4 & 6, there should be reversal of credit in terms of Rule 57F(1)(ii) of Central Excise Rules, 1944. 10.The Deputy Commissioner did not accept their pleas and therefore rejected them for the reasons given in the Order-in-Original. The Commissioner (Appeals) modified the order to some extent and rejected with regard to other claims. In both the appeals, the appellants have also not contested on few grounds on which duty has been confirmed but have contested on the following grounds which were taken up for confirming duty. (1) does not conform to specifications (2) defective inspection (3) handling damage in transit The demand....
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....s-declaration. There was no intention to evade duty and hence the question of invoking larger period in the matter does not arise. He contended that demands were time barred. 13.Ld. DR agreed to the fact that the items are in thousands and it cannot be inspected before they are removed to the production line. Further it is his contention that the item could be returned back to the supplier and could not be treated as scrap. They have to pay duty or reverse the credit and not treat the item as scrap. He also submitted that the demands were not time barred and all facts had not been disclosed and it came to light only on detection made by the Preventive Officers. 14.In counter, the learned counsel submitted that it was not possible to identify the supplier as all the items were small parts run into thousands and wherever they identified the supplier, those items were returned and such items are not subject matter of dispute. 15.We have carefully considered the submissions made by both sides and have perused both the orders. 16.In Appeal E/672/2000, the order-in-appeal passed by Commissioner of Central Excise (Appeals), Chennai is in question. The Commissioner has not acce....