Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2009 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (8) TMI 440 - AT - Central ExciseCenvat credit- Circular No. 643/3/2-CS, dated 1.7.2002- The respondents are engaged in the manufacture of Disposable Plastic Containers chargeable to Central Excise Duty. In July and Aug’99, the respondent purchased two automotive thermo forming machines and in Dec’2000, they purchased one vacuum forming machine. Total value of the machines purchased was Rs.16.65 lakhs and total duty involved was Rs.2,65,048/-. Cenvat credit in respect of these items of capital goods was taken by them as per the provisions of Central Excise Rules, 1944 at that time. After about 5 year’s used, one machine was sold by the respondent on 22-4-05 in Rs.one lakh and the other two machines were sold in Rs.1,75,000/-. However, at the time of removal of these machines, in respect of which Cenvat credit had been taken, the respondent paid duty on the transaction value at the rate of 16% ad valorem and on this basis, total duty of Rs.44,000/- was paid. The Department was of the view that since the capital goods had been removed as such, in terms of the provisions of Rule 3(5) of Cenvat Credit Rules, 2004 which were in force at that time, the respondent should have reversed the full Cenvat credit originally taken at the time of receipt of the machines and since the credit originally taken was Rs.2,65,048/- and the duty paid at the time of removal of these machines on sale was only Rs.44,000/-, the department demanded the balance amount of Rs.2,21,048/- along with interest and also proposed imposition of penalty. Asstt. Commissioner vide order-in-original confirm the demand with interest. The Commissioner (Appeals) vide order-in-appeal set aside the order-in-original and in arriving at this reason, he relied upon the Tribunal’s judgment in the case of Madura Coats Pvt. Ltd. v. CCE, Tirunelveli, in which it was held that no demand is sustainable in the absence of any provisions to demand duty on removal of used cenvated capital goods under Rule 3(5) of Cenvat Credit Rules, 2004. Held that- since out of 50% of Rs. 2,65,048/- i.e.1,32,524/- which was required to be reversed, only Rs. 44,000/- has been paid by the respondent. Thus the impugned order in appeal is not correct and the same is set aside and order in original restored.
|