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2023 (12) TMI 1238 - AT - Central ExciseReversal of cenvat credit - used/rejected capital goods on which Cenvat credit has not been taken are cleared as waste and scrap - transaction value as per Rule 3(5A) of the Cenvat Credit Rules - HELD THAT:- On going through the provisions of Rule 3(5) and 3(5A) of the Cenvat Credit Rules. A perusal of these Rules 3(5) and 3(5A) reveal that the expression "the capital goods" available in Rule 3(5A) refers to the capital goods on which Cenvat credit has been taken - Rule 3(5) provides for a situation where such capital goods are removed “as such” from the factory or premises of the provider of output service. Rule 3(5A) deals with a situation when such capital goods are cleared as "waste and scrap". It is apparent that both the provisions of Rules 3(5) and (5A), are concerned with capital goods on which Cenvat credit has been taken. As the Appellant has not availed any credit on these rejected capital goods cleared as scrap, we hold that the provisions of Rule 3(5) and 3(5A) are not applicable in this case - the demand of duty confirmed in the impugned order is not sustainable. Since, the demand of duty itself is not sustainable, the question of demanding interest or imposing penalty does not arise. The impugned order set aside - appeal allowed.
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