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2016 (12) TMI 154 - CESTAT NEW DELHIDemand - duty liability at the time of clearance of capital goods on which credit has been availed by appellant - The admitted facts are that the appellants cleared old and used capital goods (DG sets and parts thereof etc.) on payment of duty @ 10% to their sister unit at Panipat. The Department contended that they have to pay duty @ 16% Ad- valorem as prevailing at the time of clearance of such capital goods. The impugned order held that the capital goods were cleared after prolonged use and by applying Rule 3 (5A) of Cenvat Credit Rules, 2004 the duty liability @ 16% prevailing at the time of removal should be discharged - Held that: - a plain reading the provisions of Rule 3 (5) reveals that when capital goods on which Cenvat credit has been taken are removed as such from the factory, the manufacturer shall pay an amount equal to credit availed in respect of such capital goods. In the present case, there is nothing on record to show that capital goods were cleared as waste and scrap. Accordingly, we find no reason to refer to the provisions of Rule 3 (5A) of the Cenvat Credit Rules, 2004. In fact it is clear that Rule 3 (5) was amended w.e.f. 13/11/07 providing for reversal of credit based on depreciated value. Further, during the period relevant to the present case i.e. February and March 2007, the pre-amended provision will apply. In fact we also note that there are many decided case laws to support the contention of the appellant that even the provisions of Rule 3 (5) were not applicable to the appellants as the goods have been cleared after prolonged use and cannot be considered as clearance as such. However, in the present case, the appellants reversed whatever credit availed by them on such capital goods. In these circumstances, we find no justification to demand any extra amount from the appellant. Appeal allowed - decided in favor of appellant-assessee.
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