TaxTMI 
TaxTMI 
2003 (3) TMI 250
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....ds and spares etc. under Rule 57T with effect form 1-3-94 i.e. after the introduction of the scheme of availing credit on capital goods. The further allegation of the department is that the capital goods and spares after having been used in the factory premises became rejected/scrap/waste which were then cleared to different buyers in violation of the various provisions of the Rules without issuance of any statutory invoices as required under Rule 52A of the Central Excise Rules, 1944. It is in these circumstances show cause notice No. V.Ch-54(15)107-CE/Cal. IV/ Adjn/99/6287-T, dated 13-8-99 was issued to the assessee by the Commissioner of Central Excise, Calcutta-IV Commissionerate and after considering the reply to the Show cause notice and after granting personal hearing to the assessee-appellants, the Commissioner has passed the present impugned order as noted above against which the party has come in appeal. In the grounds of appeal they have inter alia stated that : (a) Proviso to Section 11A(1) cannot be invoked in this case as none of the conditions precedent for invoking the proviso was satisfied. (b) the demand for du....
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....as Rs. 12,64,827/- and these details were ignored by the adjudicating authority. (g) Items relating to invoice No. B 156, 210 and 231 involving a duty of Rs. 3,833/- were taken twice and though the appellants had pointed out this lapse, vide Para 9 of their reply to the show cause notice, their request was not considered. 3. Shri S.K. Bagaria, learned Counsel appearing on behalf of the appellants reiterated the grounds of appeal and also referred to the synopsis of the case filed by them. He has also invited our attention to the following case laws in support of their plea for setting aside the impugned order : (a) CCE v. Diamond Cement reported in 2002 (52) R.L.T. 659 wherein it was held that waste and scrap generated by dismantling of old and used machinery is not excisable goods. (b) Hindustan Petroleum Corpn. Ltd. v. CCE reported in 2002 (144) E.L.T. 555 (T) = 2002 (52) R.L.T. 688 wherein it was held that worn out and damaged parts of the machinery and plant cut into pieces for the purposes of dismantling are not excisable metal scrap. (c) Hindalco Industreis Ltd....
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....bond, as if such capital goods have been manufactured in the said factory. (2) In a case, - (a) where capital goods are removed without being used from the factory for home consumption, on payment of duty, or for export on payment of duty of excise, such duty of excise shall in no case be less than the amount of credit that has been allowed in respect of such capital goods under rule 57Q; (b) where capital goods are removed after being used in the factory for home consumption on payment of duty of excise or for export under rebate on payment of duty of excise, such duty of excise shall be calculated by allowing deduction of 2.5 per cent of credit taken for each quarter of a year of use or fraction thereof, from the date of availing credit under rule 57Q; and (c) where capital goods are sold as waste and scrap, the manufacturer shall pay the duty leviable on such waste and scrap." On reading of the above rules, it will be seen that the opening sentence of the Rule itself says "The capital goods on which credit of specified duty has been allowed (emph....
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....ng authority. The conclusion reached by the adjudicating authority that "it is very hard to swallow this argument that all the 52 spinning machine are working round the clock, through out the year, without even a single break down, without replacement of any part, during the entire period of 5/6 years appears to be impossible" deserves to be rejected as it is based on conjecture, without discussing the detailed reply and the facts and figures furnished by the appellants in reply to the show cause notice. In the absence of the detailed and thorough discussion of the various points given by the appellants, the order impugned cannot be considered a speaking order. Now we proceed to answer the issues framed above : (a) The first issue is whether the duty can be demanded on the waste and scrap of capital goods which were not modvated. We find that the appellants have asserted that they have got 52 Spinning Mills (capital goods) in their factory and most of the capital goods i.e. 46 spinning mills had been bought by them prior to the introduction of Rule 57S itself with effect from 1-3-1994. Out of these 46 spinning machines 39 were overhauled during the period....