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2018 (7) TMI 779 - AT - Central ExciseTransfer of capital goods to sister unit (transfer of business) - whether the transfer would constitute 'removal of capital goods as such' or not? - Rule 3 (5) of the Cenvat Credit Rules, 2004 - Held that:- True, Rule 3 (5) of CCR does require the manufacturer of final products to pay amount equal to credit availed in respect of the inputs or capital goods removed. However, the impugned removals are not in the nature of removal of goods for sale or to other buyers or stock transfer etc. On the other hand, these capital goods have been removed only on account of closing down of the existing unit at Coimbatore and its shifting to the Hindupur. Rule 10 is a special provision within the same CCR 2004 specifically given for such situations. Hence by the maxim of Generalia Specialibus Non Derogent, the provisions of Rule 10 will take precedence and override the general provisions in respect of removal of capital goods found in Rule 3 (5) ibid - the provisions of Rule 10 alone will have direct bearing in respect of these removals. The conditionalities of Rule 10 given in sub-rule (3) have also been complied with. Hence appellants have not fallen foul of Rule 10 of the CCR and are very much eligible to transfer the credit amount along with capital goods so transferred. The Hon’ble High Court of Karnataka in the case of CCE Bangalore-II Vs Solectron Centum Electronics Ltd. [2014 (10) TMI 596 - KARNATAKA HIGH COURT] has held that prior to 13.11.2007 there was no duty payable in respect of capital goods which was used before it is removed. Appeal allowed - decided in favor of appellant.
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