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2014 (1) TMI 1419 - AT - Service TaxAvailment of CENVAT Credit - Manufacturing of sanitaryware - Imposition of equivalent penalty - Held that:- Prima facie Rule 3(5A) of Cenvat Credit Rules, 2004 provides that “if the capital goods are cleared as waste and scrap the manufacturer shall pay an amount equal to the duty leviable on transaction value”. The capital goods mentioned in the sub-rule are Cenvat credit availed capital goods. Prima facie, sub-rule (5A) of Rule 3 of Cenvat Credit Rules applies in those cases where Cenvat credit availed capital goods after use in the factory are cleared as scrap and waste and only in such situation an amount equal to the duty on transaction value of such scrapped capital goods shall be chargeable. In this case, POP moulds cannot be said to be cenvated capital goods, as cenvat credit has been taken of the duty/Service Tax paid on inputs/input services, not of excise duty on POP moulds. In view of this we are of the prima facie view that the appellant have a case in their favour. Accordingly, the requirement of pre-deposit of duty demand, interest and penalty is waived for hearing of the appeal and recovery thereof is stayed till the disposal of the appeal - Stay granted.
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