Customs, Excise and Gold Tribunal - Delhi
Hero Cycles Ltd. vs Cce on 20 June, 2005
ORDER P.S. Bajaj, Member (J)
1. In this appeal the Appellants have contested the correctness of the impugned Order confirming the duty in respect of inputs as well as capital goods removed by them as such.
2. I have heard both sides and gone through the records. Perusal of the records shows that the appellants removed inputs as such from March, 2000 to January, 2000 after reversing the Credit taken by them. These inputs were, in fact, sent to the same supplier being defective. The plea of the Revenue that the Appellants are liable to pay duty at assessable value to be determined under Section 4 of the Act, cannot be accepted as the amendment to the provision of Rule 57AB was made w.e.f. 1.3.2001 under which it has been provided that in the event of removal of inputs as well as capital goods as j such the assessee will be liable to pay duty on the assessable value determined in terms of Section 4 of the Act and at the Tariff rate applicable at that time. But such was not the position before the amendment. In this contest reference may made to the Tribunal's decision in the case of Maruti Udyog Ltd. v. CCE, Delhi 2002 (53) ELT 395 wherein it has been observed, after following the Larger Bench decision in CCE, Vadodara v. Asia Brown Boveri Ltd. 2000 (39) RLT (CEGAT), that only credit is to be reversed on the clearances of inputs as such, prior to 1.3.2001 and in respect of clearances on or after 1.3.2001, duty at current rate is to be paid on sale price in view of amended provisions of Rules 57AB. Therefore, the demand of duty in respect of inputs in terms of amended provisions of Rule 57AB is not sustainable and the same is set aside.
3. However, the demand of duty in respect of capital goods removed as such, by the Appellants during the period from March, 2000 to June, 2000 is legally sustainable. The argument of the learned Counsel that at the time of removal of the goods the Appellants had availed only 50% of the Credit and balance 50% was yet to be availed later on and as such duty in terms of Section 4 of the Act, at the tariff rate, could not be demanded, can not be accepted being contrary to the amend of provision of Rule 57AB under which not reversal of the credit, but payment of duty at the tariff rate applicable at that time, by an assessee on the removal of the capital goods as such, after 1.3.2000, is provided. Therefore, the impugned Order confirming the duty of Rs. 5523/- in this regard is upheld.
3. Learned Counsel had contended that keeping in view the issue involved and the facts and circumstances, the penalty of Rs. 10000/-imposed on the Appellants deserved to be dropped. This contention of the Counsel, in my view, deserves to be accepted as there was no intention to evade payment of any duty. Non-payment of the duty was due to improper interpretation of amended provisions of Rule 57AB, and the Appellants remained under the bonafide belief that they were liable to reverse the credit only and no duty was payable. Therefore, keeping in view the facts and circumstances, the imposition of penalty on the appellants is not warranted and the same is set aside.
4. In the light of the above discussion, the impugned Order stands modified accordingly. The appeal of the appellants stands disposed of in above terms.
(Dictated & pronounced in the Open Court.)