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2012 (11) TMI 203 - CESTAT AHMEDABADReversal of cenvat credit - clearance of capital goods i.e. old and used forged hammer having capacity of 3 ton without payment of duty - demand, interest thereon and penalty - Held that:- Second proviso to sub rule 5 of Rule 3 of the Cenvat Credit Rules, 2004 states that if the capital goods are removed after being used, manufacturer shall pay an amount equivalent to the cenvat credit taken on the capital goods after reducing the same by 2.5% every quarter of a year or part thereof. The said provisions has to be applied on the date of clearance of the capital goods. If the second proviso to sub rule 5 of Rule 3 of the Cenvat Credit Rules is brought in to play by 31.03.04, the entire cenvat credit taken by the appellant would be 'nil'. This would mean that the appellant is not required to reverse any cenvat credit, if the appellant removes the capital goods on which cenvat credit is taken and is in use, after the ten years of its use in his factory premises. Thus finding strong force on the contentions raised by the ld. counsel assessee and also find it from records that when the appellant cleared the said capital goods on 18.03.09, he had specifically mentioned that it is "old and used forged hammer, capacity 3 ton". If that be so, the question of reversal of cenvat credit taken on the said capital goods will not arise - in favour of assessee.
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