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2017 (5) TMI 227 - AT - Central ExciseCENVAT credit - Rule 3(4) of CCR, 2002 - assessee have claimed depreciation from time to time of these capital goods - whether the cenvat credit, which was availed by the appellants’ predecessor in respect of capital goods, which were cleared by the appellants after procuring from the predecessor, is liable to be reversed by the appellants? - Held that: - after procuring these capital goods, the appellants had used these goods for manufacture of their final product. Hence the applicability of Rule 3(4) of CCR, 2002 is in question because the capital goods were not being cleared as such - The question of liability of duty on capital goods after their use was considered by Hon’ble Karnataka High Court in the case of CCE vs. Solectron Centum Electronics Ltd. [2014 (10) TMI 596 - KARNATAKA HIGH COURT] where Hon’ble High Court has analysed the term “as such” in the context of Rule 3(4) of CCR, 2004 and concluded that The assessee having validly availed cenvat credit, same is required to be reversed only if goods were cleared in the same position without payment of excise duty. The goods were not cleared in the same position but after having been used and in such situation Rule 3(4) of the Rules will not apply - the period in the present case is before 13.11.2007 - there is no liability to pay duty on clearance of impugned capital goods. The premise that transfer of ownership of these goods to M/s Kamko Food Products, fastens the liability of reversal of credit availed by the seller of the goods in the absence of sale of running unit is not legally sustainable. Appeal allowed - decided in favor of appellant.
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