Commissioner of Central Excise Vs. Permanent Magnets Ltd.

Commissioner of Central Excise vs Permanent Magnets Ltd.

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Mar 10, 2006

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Citation: sooperkanoon.com/42134
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: T Anjaneyulu, S T C.
Decided On: Mar 10, 2006
Subject: Land Acquisition

Case Summary

AI-generated summary - not the official court judgment text.

Land Acquisition

Key legal issue: Land Acquisition

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

Permanent Magnets Ltd.

Excerpt

.....castings at the rate of rs. 1034/- per kg and rs. 525/- per kg to their daman unit for manufacture of permanent magnet. a part of this castings was found to be defective and unsuitable for making magnets and such defective castings were detected during the course of manufacture and the same were transferred to their original unit for melting. the transfer of defective materials were done at the rate of rs. 225/- per kg and rs. 110/- per kg. the id. advocate for the respondents states that the prices were adopted at par with the price of steel scraps prevailing at the market. the duty demands were raised on the respondents on the ground that the defective goods are excisable goods and have marketability but it may fetch a lower price than first quality good but not as low price as of waste and scrap. the original authority has confirmed the demand taking the price of such rejected goods to be the same as that of first quality goods used in the manufacture of permanent magnet. the lower appellate authority has set aside the said order. hence, the present appeal by the revenue.2. after hearing both sides, we find that the lower appellate authority in his order has not recorded the issue involved correctly and the reason for his order is not very pertinent. however, we find that the valuation adopted by the original authority cannot be sustained as the value of the defective material cannot be as that of the first quality material used in a manufacturing process. besides, we find that whatever duty is paid by the respondents at the time of clearance of the rejected material, is also taken as credit in their sister unit and hence if they were to pay higher amount of duty that much credit would also be available to them. taking into account the above aspects, we do not find any reason to sustain the order-in-original and hence we reject the appeal filed by the revenue.3. the cross-objection filed by the respondents also stands disposed of.

Full Judgment

1. Heard both sides. In this case, the respondents cleared castings at the rate of Rs. 1034/- per kg and Rs. 525/- per kg to their Daman unit for manufacture of permanent magnet. A part of this castings was found to be defective and unsuitable for making magnets and such defective castings were detected during the course of manufacture and the same were transferred to their original unit for melting. The transfer of defective materials were done at the rate of Rs. 225/- per kg and Rs. 110/- per kg. The Id. advocate for the respondents states that the prices were adopted at par with the price of steel scraps prevailing at the market. The duty demands were raised on the respondents on the ground that the defective goods are excisable goods and have marketability but it may fetch a lower price than first quality good but not as low price as of waste and scrap. The Original authority has confirmed the demand taking the price of such rejected goods to be the same as that of first quality goods used in the manufacture of permanent magnet. The lower Appellate Authority has set aside the said order. Hence, the present appeal by the Revenue.

2. After hearing both sides, we find that the lower Appellate Authority in his order has not recorded the issue involved correctly and the reason for his order is not very pertinent. However, we find that the valuation adopted by the Original authority cannot be sustained as the value of the defective material cannot be as that of the first quality material used in a manufacturing process. Besides, we find that whatever duty is paid by the respondents at the time of clearance of the rejected material, is also taken as credit in their sister unit and hence if they were to pay higher amount of duty that much credit would also be available to them. Taking into account the above aspects, we do not find any reason to sustain the Order-in-Original and hence we reject the appeal filed by the Revenue.

3. The Cross-objection filed by the respondents also stands disposed of.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Commissioner of Central Excise vs Permanent Magnets Ltd. Same Subject Land Acquisition Same Judge T Anjaneyulu, S T C.