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2016 (3) TMI 995 - AT - Central ExciseCENVAT credit on capital goods removed as waste and scrap - Whether the capital goods, if removed, without installation and without putting to use, as waste and scrap will attract duty equal to the amount of credit taken or the duty on the transaction value of the machine sold as waste and scrap - Held that:- The facts is not under dispute that the appellant have availed the Modvat Credit on capital goods which was neither installed in the factory of the appellant nor used for the manufacture of final product. The capital goods were without putting into use cleared showing as waste and scrap. The provision for duty liability on removal of capital goods is provided under Rule 57S of erstwhile Central Excise Rules 1944 which clearly provided that if the capital goods are removed without being used the excise duty payable shall in no case be less than the amount of credit that has been allowed. Intention of the legislature is very clear that when the removal of capital goods is without being used is different from the capital goods sold as waste and scrap that means the term sale of capital goods as waste and scrap then the excise duty shall be payable on the transaction value of the waste and scrap. It is to be kept in mind even after use for some time if the capital goods is sold then also the excisable duty is payable in terms of Clause (b) after allowing the deduction of 2.5% of credit taken for each quarter. Therefore when the capital goods is not installed or has not been used its clearance will clearly fall under the clause (a) of Sub-Rule (2) and not under Clause (c). It is therefore of the view, that the appellant is required to pay excise duty on the capital goods cleared without being used in terms of clause (a) of Sub-rule (2) of Rule 57S of the Central Excise Rules, 1944. Accordingly, equal amount of Cenvat Credit which has been availed shall be payable by the appellant. Commissioner by careful application of mind, after interpreting the provisions of rule 57S(2) held that the removal of capital goods in the present case is covered under Sub-rule (2)(a). - Decided against assessee
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