TRIVENI ENGG. AND INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) This appeal has been filed against the order of Commissioner (Appeals) dated 31.5.2005, upholding the order -in -original by which demand of duty of Rs. 95,079/ - on clearance of scrap valued at Rs. 5,94,241/ - cleared as "old and discarded machinery" was confirmed and a penalty of Rs. 20,000/ - was imposed on the appellant with the demand of interest on the duty amount.

(2.) THE appellant was engaged in the manufacture of cane sugar and molasses. According to the Revenue, the appellant committed breach of Rules 4, 8 and 10 of the Central Excise Rules, 2002 by not paying duty on the value of goods cleared during the period from May 2002 to March 2003 being old and discarded capital goods cleared as such on which the appellant had availed cenvat credit. It was alleged that the appellant did not submit any information with the department about clearance of the said capital goods without payment of duty and the matter could be detected only after the visit of the audit party. The goods were nickel screen, bearings, V. Belts, chain scraps etc.

(3.) THE case of the assessee was that the worn out pieces of machinery used in crushing sugar cane were required to be discarded as scrap, which was not dutiable at the relevant time. According to the assessee, the items were discarded only after they were used to a maximum extent and had lost their utility. Reliance was placed on the decision of the Tribunal in Hindalco Ind. v. CCE, reported in 2002 (339 in support of the case.