9911796707
TMI Blog2004 (4) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts of the case are that the appellants had removed different items of used textile machinery on 11-2-2002 and 2-5-2003. On the item cleared on 11-2-2002, the appellants paid duty on its value after applying depreciation on the purchase price of the item @ 2.5% per quarter of its use. On the other two items of machinery cleared on 2-5-2003, the appellants paid duty on the invoice value. 2. At the time of clearance of the first item, the relevant Rule 3(4) of Cenvat Credit Rules, 2000 read as follows :- "3(4) When inputs or capital goods on which CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the duty of excise which is leviable on such good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared the capital goods on payment of duty on the invoice value which was in consonance with the CBEC's Circular No. 64/34/2002 dated 1-7-2002 which prescribed that when capital goods were removed on sale, transaction value shall be adopted for payment of duty. Ld. advocate also cited the decision of the Bangalore Bench of the Tribunal in the case of Madura Coats Pvt. .Ltd. v CCE, Tirunelveli [2005-TIOL-891-CESTAT-BANG] wherein the Hon'ble Tribunal held that assessees were not required to pay duty when they sold 'used capital goods'. The Tribunal held that Rule 3(4) of the Cenvat Credit Rules, 2001/2002 applied only to 'capital goods removed as such' i.e. new goods or goods which were not put to use. 5. Ld. Advocate also submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that they pay duty on the transaction value. They removed the remaining goods on payment of duty on transaction value when the relevant rules had changed requiring them to reverse the credit originally availed. In this context, the definition of the expression 'capital goods removed as such' interpreted by the Bangalore Bench of the Tribunal is relevant. According to the Hon'ble Tribunal, 'used capital goods' are not covered by Rule 3(4) of Cenvat Credit Rules, 2001/2002. Therefore, the appellants' argument that they are not required to pay even the duty they paid carries considerable force. Moreover, it is difficult to deny the assertion that the SCN was issued in this case much beyond the normal period with no grounds to justify invocat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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