TMI Blog2015 (10) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... pay an amount equal to the duty leviable on transaction value. There is no dispute on the fact that these rollers are capital goods used and worn out. These goods were not cleared as such as held by the department but these are used and worn out. Once the engravings are worn out, it cannot be used in printing of material unless the engravings are redone which involves detailed processing of enameling, melting etc. which amounts to manufacture. The appellants have also cleared the goods in equal proportion to dealers also. - In the present case demand of reversal of entire credit on used and worn out capital goods cleared is not sustainable as these goods are cleared as such but used and worn out Rollers. Accordingly the demand is restricted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have cleared the used and worn out cylinders/printing rollers as a scrap on payment of appropriate excise duty as per the transaction value. Revenue took a view that the goods in dispute are capital goods removed as such by the appellants. Therefore, entire credit availed on the rollers was demanded. In Appeal No. E/12/2008, appellants have removed Slitting Machine, Blown film plant, 3 Layer Blown Film Machine, Expert Lamination machine, Forklift truck which are old and used machineries on payment of duty on transaction value whereas the department demanded full reversal of credit as the capital goods are cleared as such. Commissioner (Appeals) has upheld the order. Hence the present appeal. 3. Ld. Advocate appearing for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submits that if the depreciation is allowed on the used goods, they have already paid excess duty as per transaction value. He submitted a work sheet. There was ambiguity on the removal of capital goods as such and it involves question of interpretation of rules and various High Court and Tribunal rulings held on this issue that no penalty is imposable. He relied on the Hon'ble Karnataka High Court's decision in CCE Bangalore Vs Solectron Centum Electronics Ltd. - 2014 (809) ELT 479 (Kar.). He relied this Tribunal order No.40405/2005 dt.18.7.2014 in the case of CCE Salem Vs K.P.R. Mills Pvt. Ltd. 4. Ld. A.R reiterates the findings of the impugned order. What they purchased is cylinders/rollers and availed capital goods cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3.2003 where the provisions were inserted for removal of inputs and capital goods removed as such and stipulates where the amount equal to the credit availed on such inputs or capital goods is to be paid by the manufacturer. Rule 3 (5A) was also introduced w.e.f.16.5.2005 wherein specific provisions have been inserted that if the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value. There is no dispute on the fact that these rollers are capital goods used and worn out. These goods were not cleared as such as held by the department but these are used and worn out. Once the engravings are worn out, it cannot be used in printing of material unless the engravings are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Though the contention of the learned Standing Counsel appears to be very sound in the first blush, we are not in a position to accede to the said submission. Rule 3(4) (C) of the 2004 Rules reads as under: 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 credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 7.1. 6. In the first place, the provision for reversal of the Cenvat credit availed has been provided for under Rule 3(4)(C) of the 2004 Rules. When we peruse the order of the Principal Bench, New Delhi in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch subsequent sale of capital goods. Such a conclusion by relying upon the above referred to Boards Circular and the letter as well as the addition of proviso to Rule 3(5) with effect from 13.11.2007, is the manner in which the expression as suchused in Rule 3(4) can be interpreted. Consequently, the interpretation put in the order of the Principal Bench reported in 2009 (242) ELT 124 merits acceptance. The order of the Tribunal impugned in this appeal applying the said ratio of the Principal Bench is, therefore, perfectly justified. The Hon'ble Madras High Court upheld the Tribunals decision that used capital goods are cleared after put into use, on which cenvat credit has been availed, the respondent discharged the duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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