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The Commissioner of Central Excise Versus M/s. Lakshmi Machine Works Ltd. And Others

2015 (3) TMI 694 - MADRAS HIGH COURT

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 - R. Sudhakar And S. Vimala,JJ. For the Appellant : Mr. E. Vijay Anan .....

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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 Credit, a show cause notice was issued to the assessee by the Deputy Comm .....

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it 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 carefully considering the decisions placed before it held in favour of .....

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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 not sustainable. Accordingly, the impugned order is set aside and the ap .....

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ation 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 when used capital goods are removed from the factory or not? 8. From a .....

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