SUPREME INDUSTRIES LTD. Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) THE lower authorities have demanded duty of over Rs. 12 lakhs from the appellant on moulds for the period July to September, 2001. The demand is in terms of Rule 3(4) of the Cenvat Credit Rules, 2001 which provision reads as under : When inputs or capital goods, on which Cenvat credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of such removal and on the value determined for such goods under Section 4 or Section 4A of the Act, as the case may be, and such removal shall be made under the cover of an invoice referred to in Rule 7. During the aforesaid period, the appellant was also clearing, without payment of duty, used moulds to other units of theirs. According to the Department, such clearances should be accompanied by payment of appropriate duty. According to the assessee, capital goods can be said to have been removed "as such" only when they are removed in the original virgin condition. According to them, used moulds cannot be said to have been removed "as such" for the purpose of the above provision. Learned Consultant has relied on the Tribunal's decision in Madura Coats Pvt. Ltd. v. CCE, Tirunelveli , wherein it was held, with reference to the above provision, that removal of used capital goods did not fall within the meaning of the expression "removal of capital goods as such". We have heard the learned SDR also.

(2.) APPELLANT seems to have a prima fade case on the strength of the decision cited by them. It appears from the records that the appellant paid an amount of Rs 4.5 lakhs towards the above demand. In the circumstances, there will be waiver of pre -deposit and stay of recovery in respect of the balance amount.