TMI Blog2010 (7) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... as held in the case of Cummins India Ltd. (supra), which is squarely applicable to this case - appeal is allowed - E/72/2009-MUM - A/296/2010-WZB/C-IV/SMB - Dated:- 7-7-2010 - Shri Ashok Jindal, Member (J) REPRESENTED BY : Shri Bharat Raichandani, Advocate, for the Appellant. Shri K. Lal, SDR, for the Respondent. [Order]. - The appellant has filed this appeal against the confirmation of duty demand of Rs. 1,63,644/- together with interest and equivalent amount of penalty. 2. The facts of the case are that the appellant had imported some machinery in 1995 on which it availed Cenvat credit of the CVD paid on the same. The CVD was paid on the purchase value of the machine at Rs. 13,02,717/-. After using the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val of capital goods. Moreover, while conducting the audit by the department the issue was raised by the Audit party and the allegation was denied by the appellant that the different duty is not payable. The show-cause notice issued after a period of one year is barred by limitation. With regard to the merits of the case, it is submitted that the said machine was imported on 10-10-1995 and the approximate life of the machine at that time was 7 years. The machine was sold after 8 years due to wear and tear and it was found that there were too many sharp corners forming folds and heavy cracks in the forgings produced by the said machine. The machine was not sold as such, it was sold as used machine. The provisions of Rule 3(4) of the Cenvat C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf of the Revenue submitted that this issue has been squarely covered by the case of Modernova Plastyles Pvt. Ltd. v. CCE, Raigad as reported in 2008 (232) E.L.T. 29 (Tri.-LB). He submitted that in paragraph 1 and 2 of the said order the Tribunal has considered the meaning of the expression "as such". The Tribunal has observed the expression "as such" has to be interpreted as commonly understood, which is in the "original form" and "without any addition, alteration or modification." It does not have any connection with the goods (capital goods) being new/unused or used. Finally the Tribunal held that the explanation as such not having any communication "as such" to be interpreted as commonly understood, which is in the "original form" and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 450 (Tri. - Bang.) wherein the Tribunal held that duty on used cenvated capital goods is not required to be paid when they are sold. What is important to note that used capital goods referred to capital goods which have become scraps and which cannot be used for the purpose for which they are meant to be used. If they are still in a usable condition, they will not fall in the category of used goods. It was observed by the adjudicating authority that the appellant has intentionally paid less amount of duty while clearance of the goods hence the extended period of limitation was rightly invoked. The Commissioner (Appeals) has relied on the decision of the Madura Coats Pvt. Ltd (supra) and confirmed the demand with regard to the limitation. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difference between the selling price and purchase price as observed by audit." 6.1 From the perusal of the para 3 it is clear that the appellant had explained the short reversal of the credit and the fact was well within the knowledge of the department, but the department has failed to issue show-cause notice within one year of the audit conducted by the department. The demand is time barred. 6.2 On merit also, in the case of Cummins India Ltd. (supra) the Tribunal has held that "the plain and simple meaning of the expression "as such" would be that capital goods are removed without putting them to use. Admittedly, in the present case capital goods stand used for a period of more than 7 to 8 years. As such, the interpretat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02 and does not consider the provisions of Rule 4(5)(a) of CCR, 2004 and therefore cannot be said to cover the present issue. In the case of Modernova Plastyles Pvt. Ltd. the issue before the Larger Bench was in relation to interpretation of the expression "as such" in Rule 4(5)(a) of Cenvat Credit Rules, 2004. When the Larger Bench has clearly distinguished the Rule 4(5)(a) of Cenvat Credit Rules, 2004 and Rule 3(4) of Cenvat Credit Rules, 2002, the decision of the Modernova Plastyles Pvt. Ltd. is not applicable to the facts of this case. Hence, on merits also the appellant is not required to reverse the Cenvat Credit as held in the case of Cummins India Ltd. (supra), which is squarely applicable to this case. 7. With these observa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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