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2023 (5) TMI 932 - AT - Central ExciseReversal of CENVAT Credit - removal of capital goods - case of appellant is that provision of Rule 3(5) of the Cenvat Credit Rules, 2004 would not be applicable to the appellant’s case as the goods has been used before the same work removed - HELD THAT:- It is not in dispute that the capital goods on which the credit was availed, has been removed after some use. It is notice that Rule 3(5) and Rule 3(5A) Cenvat Credit Rules, 2004 deal with the obligation of a personal availing credit when that person removes the capital goods on which the credit has been availed. From the sequence of events, it apparent that there was no Rule for reversal of Cenvat Credit on capital goods cleared after some use. Similar case has been examined by Tribunal in the case of RAGHAV ALLOYS (P) LTD [2009 (4) TMI 184 - CESTAT, NEW DELHI] wherein it was held that If the Department’s view is accepted, it would lead to absurd results as even when the cenvated capital goods are cleared after long years of use at a small practice of their original value, still full Cenvat credit originally taken would be required to be reversed which would defeat the very purpose of grant of Cenvat credit facility in respect of capital goods. Hon’ble High Court in the case of ROGINI MILLS LTD [2010 (10) TMI 424 - MADRAS HIGH COURT] has also been examined similar issue and concluded that The capital goods on which Cenvat credit had been taken or removed after being used, the Manufacturer should pay an amount equal to the Cenvat credit taken on the said capital goods reduced by 2.5% for each quarter of a year or part thereof from the date of taking the Cenvat credit. It is noticed that in the instance case the appellant has reverse the Cenvat Credit equivalent to the duty on the transaction value of the capital goods cleared. Since, such reversal has been accepted by the Tribunal and the Hon’ble High Court, the reversal sought by the revenue at a different rate cannot be accepted. Appeal allowed.
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