Whether excise duty payable on capital goods/ inputs which are written off in the books but still existed in premises?

PJ/Case Law/2014-15/2018

Case:- COMMISSIONER OF C. EX. & CUS., AURANGABAD VERSUS TTK HEALTH CARE LTD.

Citation:- 2014 (301) E.L.T. 348 (Tri. – Mumbai)

Brief facts:- The brief fact of the case are that in the balance sheet for the period 1997-1998, 1998-1999, 1999-2000, the respondents have written off capital goods but not cleared from their factory. Revenue is of the view as they have written off the capital goods and inputs in the books of account, they are liable to pay duty along with interest and penalties. The adjudication took place, demands as per the show cause notices were confirmed which were dropped by the Commissioner. Aggrieved from the same Revenue is before Tribunal.

Appellant’s contention:- The appellant submitted that as respondents have written off these capitals goods and inputs in their balance sheets, therefore, they are liable to pay duty, interest and penalty.

Respondent’s contention:- The counsel for the assessee pleaded that the order of the Commissioner Appeals was legal and proper and the same should be upheld.

Reasoning of judgment:-After hearing the submissions from both sides, the adjudicating authority find that the Commissioner has recorded in his findings that these capital goods and inputs which have written off by the respondents in their balance sheets were still lying in their factory and duty is payable on the clearance of goods/inputs/capital goods. Therefore, as the goods have not been cleared from the factory, duty is not payable. They further find that whatever inputs were cleared by the respondents, they have paid duty on the same capital goods/inputs. In these circumstances, they do not find any merit on the Revenue’s appeal. Therefore, Tribunal do not find any reasons to interfere with the impugned order, the same is upheld. The appeal filed by the Revenue in dismissed.

Decision:- Appeal dismissed.

Comment:- The essence of the case is that the duty is payable only on clearance of inputs/capital goods and not in a situation when the inputs/capital goods have been written off in the books of accounts but are still present in the factory premises.

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PJ/Case Law/2014-15/2018

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