2012 (6) TMI 340 - HC - Central Excise

Duty liability - Sale of used capital goods - applicability of Rule 3(5) of the CENVAT Credit Rules, 2004 - revenue contended duty liability together with interest and penalty on cenvat credit taken on capital goods - Held that:- Appellant has used the capital goods in its factory for a period of 2 to 4 years, before selling it to M/s. HIPL. They cannot therefore be stated to be sold “as such” capital goods. They were sold as used capital goods. Hence, Rule 3(5) has no applicability. Appellant is not liable to the payment of duty, interest or penalty.

In view of aforesaid, the goods are not liable to be confiscated. They are, therefore, liable to be released without payment of any redemption fine and any penalty under Rule 25 of the Central Excise Rules, 2002 - Decided in favor of assessee.