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2015 (10) TMI 1984 - CESTAT MUMBAI

2015 (10) TMI 1984 - CESTAT MUMBAI - 2015 (326) E.L.T. 202 (Tri. - Mumbai) - Reversal of Cenvat / Modvat Credit - Removal of Capital goods after use - Transfer of credit - Penalty under Rule 25 of the CER 2002 - Held that:- Rule 3 (5) of the Cenvat Credit Rules, 2004 provides for the reversal of Cenvat Credit only when the goods are removed as such . In the facts of the case as admitted, the goods have been used for about 10 years. Thus, the goods are not removed as such , no credit is required .....

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mm. (AR) : For The Respondent ORDER Per: Anil Choudhary 1. The appellant, M/s.United White Metal Ltd., is a manufacturer of parts of lifts/escalators. The appellant purchased the manufacturing facility including the plant and machinery from M/s.OTIS Elevator Co. (I) Ltd. in the year 2003. After using the plant and machinery acquired for manufacturing, the appellant vide their letter dated 31/05/2007 informed the Range Superintendent that they have closed their manufacturing operations with effec .....

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any excise duty thereon. List of equipment/machines, which the appellant intended to sell, was also enclosed. Pursuant thereto the appellant removed the capital goods/machines during the period June 2007 to August 2007. 2. A show-cause notice dated 04/07/2008 was issued taking notice of the fact that the machines disposed of were acquired originally by the OTIS on 30.11.1995/ 31.03.97/27.10.97. It appears to Revenue that OTIS had availed Modvat credit on the capital goods and such goods were so .....

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n the CBEC Circular No.643/34/2002 dated 01/07/2002. Accordingly, the appellant was required to show-cause as to why excise duty amounting to ₹ 5,37,248/-, including cess payable, on the transaction value of the capital goods, at the time of clearance from the factory premises should not be demanded and recovered and further penalties were proposed under Rule 25 of the Central Excise Rules, 2002. The appellant contested the show-cause notice and the same was adjudicated by order-in-origina .....

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pellant is before this Tribunal. 3. The learned Counsel for the appellant pointed out that there have been a change in the legal provisions/Rules with regard to the removal of capital goods. Prior to 01/03/2003 Rule 3 (4) of Cenvat Credit Rules 2001 provided - 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 goods at the rates .....

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n respect of such inputs or capital goods and such removal shall be made under the cover of an invoice, referred to in Rule 7. In the succeeding Cenvat Credit Rules 2004, the provision remains as such. Subsequently, the provision was amended, proviso was inserted with effect from 30/11/2007 providing that - if the capital goods on which separate credit has been taken is removed after being used, the manufacturer or the provider of out put service shall pay an amount equivalent to the Cenvat cred .....

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