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2017 (4) TMI 379 - AT - Central ExciseRemoval of capital goods after use - The contention of the department is that appellant is liable to pay excise duty on such removal - Held that: - Duty on removal of capital goods is payable only where the capital goods is removed as such, that means without putting to use. On removal of capital goods after use there is no provision for payment of duty. There is a provision for payment of duty either under Rule 3(5) or Rule 4(5)(a) on removal of capital goods but there is no machinery provision for recovery of the cenvat credit for the reason that Rule 14 only provides for recovery mechanism in case of wrong availment of credit. In the present case, the availment of credit is not wrong. The revenue is seeking payment of cenvat credit only on the removal of capital goods and there is no machinery provision for recovery of duty on removal of capital goods. At the material time, no provision existed for recovery of cenvat credit in case the assessee fails to pay the excise duty on removal of capital goods. In the present case, the appellant have admittedly paid duty along with interest before issuance of SCN - The appellant have admittedly paid duty and their grievance is only against imposition of penalty and demand of interest - As regards the interest, once the appellant have admittedly paid the duty, payment of interest is inevitable and the same is piggyback of the principal amount of duty. Therefore, the interest was rightly demanded - demand of interest upheld. The duty was not otherwise chargeable on the removal of capital goods, the penalty u/s 11AC is not imposable - penalty imposed u/s 11AC is set aside. Appeal allowed - decided partly in favor of appellant.
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