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2015 (3) TMI 694 - MADRAS HIGH COURT

2015 (3) TMI 694 - MADRAS HIGH COURT - 2015 (321) E.L.T. 577 (Mad.) - Denial of CENVAT Credit - Capital goods - Removal of capital goods as such - Whether the Honourable CESTAT was correct in holding that 'Capital Goods removed as such' would mean without putting the machinery to any use - Held that:- Following decision of Commissioner of Central Excise, Salem Vs M/s.Rogini Mills Ltd. [2010 (10) TMI 424 - MADRAS HIGH COURT] - Decided against Revenue. - C.M.A. NO. 1117 OF 2008 - Dated:- 12-3-2015 .....

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oved as such' would mean without putting the machinery to any use 2. The facts, in a nutshell, are as hereunder :- The assessee received one 'speed frame lapping machine' in the year 1997 and took credit of ₹ 1,37,581/- under the head capital goods. After usage of the machine for about 8 years in the manufacture of final products, the assessee cleared the same by reversing the credit to the extent of ₹ 42,400/-. In view of such removal of goods and availment of Cenvat Cre .....

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issioner (Appeals) held that in terms of Rule 3 (5) of the CENVAT Credit Rules, 2004, when capital goods on which Cenvat credit had been taken were removed as such from the factory, an amount equal to the credit availed in respect of such capital goods had to be paid. Accordingly, the Commissioner (Appeals) allowed the appeal filed by the Revenue against which the assessee preferred appeal to the Tribunal. 4. The Tribunal, on a careful consideration of the case and upon hearing either side and c .....

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apital goods after putting it to use for about 8 years. The appellants were required to reverse the credit equal to the credit originally availed only if the capital goods were removed as such which meant without putting the machinery to any use. In the facts of the present case, therefore, the appellants were not required to reverse any credit. In the circumstances, the impugned order demanding differential credit or ₹ 95,181/-, interest thereon and imposing penalty on the appellant is no .....

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11 (264) ELT 367 (Mad.)). 7. Similar question of law fell for consideration before this Court in Rogini Mills case (supra), wherein the 1st question of law framed is identical to the one framed in the case on hand. The questions of law framed are quoted hereunder :- 1)Whether the expression as such appearing in Rule 3 (4) (c) of the Cenvat Credit Rules, 2002, would cover used as well as unused capital goods or not? 2) Whether the assessee is required to reverse credit equivalent to credit taken .....

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