VIGNESH YARNS PRIVATE LTD. Vs. CCE

JUDGEMENT

(1.) M /s. Sri Vignesh Yarns Private Ltd., Avinash Taluk had cleared scrap of used machinery and used spares during the period July'99 to March'02. After due process of law, the Deputy Commissioner, Tiruppur Division demanded an amount of Rs. 61,673/ - under Section 11A(1) of the Central Excise Act and imposed equal amount of penalty under Section 11AC. Interest due on the duty confirmed was also demanded. In the impugned order, the Commissioner (Appeals), Coimbatore upheld the order of the original authority and rejected the appeal filed by M/s. M/s. Sri Vignesh Yarns Private Ltd. The consultant appearing for the appellants submits that the goods removed by the appellants were scrap of construction materials and scrap of machinery on they which they had not availed capital goods credit. Duty was not due on waste construction material and scrap of machinery on which credit had not been taken. He prays that the impugned order is not sustainable in law and may be set aside. Ld. SDR submits that in terms of Note 8(a) to Section XV of Central Excise Tariff Act, 1985, the impugned goods are dutiable. The demand is, therefore, sustainable. The appellants had not shown before the lower authorities that what was cleared were not dutiable items or were not scrap of machinery on which credit was availed. Therefore, the impugned demand and the penalty are sustainable.

(2.) I have carefully considered the case records and the submissions made by both parties. The demand in question has been raised for the duty due on the goods removed. There is no dispute that the goods removed were metal scrap and the scrap of used machinery. As per Note 8(a) to Section XV, waste and scrap is "metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting up, wear or other reasons".