TMI Blog2005 (9) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... apply in respect of the capital goods and inputs on which credit has been availed are removed as such. Thus, we hold that the reference has to be answered in favour of the appellants. Since no other issue arises in the said matter, the appeal is allowed. - HON'BLE S.S. KANG, VICE-PRESIDENT, C.N.B. NAIR (T) AND M.V. RAVINDRAN (J), MEMBERS For the Appellant : Shri B.L. Narsimhan, Advocate, For the Respondent : S.M. Tata and Deepak Garg, Authorized Representative DR Order M.V. Ravindran, Member (J) 1. In view of the conflicting decision on the issue in respect of the correct valuation of the capital goods and the Inputs on which Cenvat credit has been availed when removed as such, the issue has been referred to the Larger Bench. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Point of doubt Clarification 14. How will valuation be done when inputs or capital goods; on which Cenvat credit has been taken, are removed as such from the factory, under the erstwhile sub-rule (1C) of Rule 57AB of the Central Excise Rules, 1944, or under Rule 3(4) of the Cenvat Credit Rules, 2001 or 2002? Where inputs or capital goods, on which credit has been taken, are removed as such on sale, there should be no problem in ascertaining the transaction value by application of Section 4(1)(a) or the Valuation Rules. [Provided tariff values have not been fixed for the inputs or they are not assessed under Section 4A on the basis of MRP]. There may be cases where the inputs or capital goods are removed as such to a sister unit of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (1) of Section 4 of the Act. In that case, it would be reasonable to adopt the value shown in the invoice on the basis of which Cenvat credit was taken by the assessee in the first place. In respect of capital goods adequate depreciation may be given as per the rates fixed in letter F.No. 495/16/93-Cus.-IV dated 26-5-1993, issued on the Customs side. The learned advocate points out that there was one more circular on this specific point vide Circular No. 813/10/2005, dated 25-4-2005 which at Para No. 2 and the table reads as under : I am directed to refer to Board s letter No. 6/39/2000-CX. I, dated 1-7-2002 [2002 (143) E.L.T. T39] clarifying certain points relating to the Central Excise Valuation (Determination of Price of Excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Board s Circulars No. 643/34/2002-CX., dated 1-7-2002 [2002 (143) E.L.T. T39] and No. 813/10/2005-CX., dated 25th April, 2005 [2005 (183) E.L.T. T3] in which clarification was issued on valuation in certain situations, inter alia in respect of valuation of capital goods or inputs removed as such from the factory of the manufacturer. It was clarified that in such situations, the provisions of Rule 3(5) of Cenvat Credit Rules, 2004 shall apply. 2. Consequent to that, a point has been raised as to whether the provisions of Rule 3(5) of Cenvat Credit Rules, 2004 shall apply to situations when the provisions of sub-rule (1C) of Rule 57AB of Central Excise Rules, 1944, or Rule 3(4) of Cenvat Credit Rules, 2001 or Rule 3(4) of Cenvat Credit Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding the duty on the Transaction Value of the inputs cleared as such. 6. It is seen that the Board vide its circular dated 25-4-2005 has categorically said that clarifications given in this Circular supersede the earlier Circular dated 1-7-2002. The revenue cannot argue against its own Circular, when the Board has stated that the provisions of the Rule 3(5) of the Cenvat Credit Rules, 2004 would apply in respect of the capital goods and inputs on which credit has been availed are removed as such. We may reproduce the said Rule 3(5) of the Cenvat Credit Rules, 2004 which reads as under : 3(5) When inputs or capital goods, on which Cenvat credit has been taken, are removed as such from the factory, or premises of the provider of output servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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