ORDER
G.R. Sharma, Member (T)
1. Arguing the case for the appellant Shri G. Shiv Das, ld. Counsel submits that M/s. Jamna Auto Industries had two Divisions. In one division Stabiliser bars falling under Chapter Heading 87.08 were being manufactured and in the other division Leaf springs falling under Chapter Heading 73.20 were being manufactured. M/s. Jamna Auto Industries sold the Stabiliser Bar Division as such to a Joint Venture Company, Jamna NHK Allevard Suspension Components. The Department issued SCN that there is removal of capital goods, raw materials etc. when the Stabiliser Bar Division was sold to Jamna NHK and that accordingly, the applicants should have paid duty at the time of the alleged removal.
2. Ld. Counsel submitted that Rules 57F(3) and 57S(1)(ii) contemplate payment of duty if removal of inputs/capital goods takes place. He submits that removal under these two Rules is governed by Rule 9 of the Central Excise Rules, 1944. He submits that in the present case, there was no removal as contemplated under Rule 9 and Rule 49; that it was only a change of ownership of the Stabiliser Bar Division from the applicants to Jamna NHK; that the capital goods and the inputs have remained in the same factory premises; that there has been no removal for consumption or for export or for manufacture of any other commodity in or outside the premises in the act of change of ownership. He submitted that the duty is being demanded on the inputs, work-in-process and finished goods transferred from the applicants to Jamna NKH. He submits that even if this duty was paid, the same would have been available to Jamna NHK as credit as these inputs were ultimately used in the manufacture of final products by them. Ld. Counsel submitted that Jamna NHK have paid duty amounting to Rs. 45,34,983/- by debiting the amount in PLA. He submitted that if the applicants had paid duty as desired by the Department, this amount would have been available as credit to Jamna NHK, and there would have been no need to pay duty from PLA. He submitted that the entire exercise is of Revenue Neutral. He submitted that there was no intention to evade payment of duty. Ld. Counsel submitted that there was no suppression inasmuch as when a division of Jamna Auto Industries was sold to a Joint Venture Company, the licence was amended and a new licence was obtained from the new company. He submitted that looking to the above submissions, pre-deposit of duty and penalty may be waived. He submits that any direction to deposit any amount would create undue hardship. In support of his contention that if the payment of duty in any case is of Revenue Neutral then pre-deposit of duty and penalty is dispensed with. In support of his contention he cites and relies upon the decision of this Tribunal in the case of Indian Rayon and Industries v. CCE, Calcutta-IV reported in 1999 (113) E.L.T. 506. He submits that a similar view was taken by the Tribunal again in the case of Indian Seamless Metal Tubes Ltd. v. CCE, Pune reported in 2000 (115) E.L.T. 669, in the case of Narmada Plastics (P) Ltd. v. CCE, Raipur reported in 2000 (115) E.L.T. 671 and in the case of India Polycoats (P) Ltd. v. CCE, New Delhi reported in 1998 (103) E.L.T. 435 and a number of other cases.
3. Opposing the request Shri S.K. Das, ld. DR submits that there was a sale of a Division of the applicant to a Joint Venture Company and Registration of a New Unit. This amounted to the removal of raw materials, capital goods and finished products. He submits that thus the authorities below have rightly demanded duty and confirmed the demand. He reiterated the findings of the authorities below.
4. We have heard the rival submissions. We have also perused the case law on the subject. We have also perused the evidence on record. In the instant case the Department has demanded duty from the applicants. The applicants had contended that in case the applicants had paid duty that amount of duty would have been taken as Modvat credit by the Joint Venture Division. We find that thus prima facie it appears that the entire exercise was Revenue Neutral. Following the ratio of the decisions cited by the applicants, we find that in such cases, pre-deposit of duty and penalty is dispensed with. Following the ratio of these decisions, we dispense with pre-deposit of duty and penalty. The stay petition is allowed in the above terms.