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Motor Industries Co. Ltd. Versus C.C.E., Jaipur-I

2016 (7) TMI 1199 - CESTAT NEW DELHI

Cenvat Credit - capital goods - after using them for about 3-6 years, cleared them to their sister unit in Bangalore reversing Cenvat credit as applicable on the depreciated value of the capital goods - The Commissioner (Primary Adjudicating Authority) held that the entire amount of Cenvat credit taken at the time of acquisition of these capital goods was required to be paid (reversed) at the time of clearance of these goods as capital goods were removed as such i.e. as capital goods and not as .....

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after use. In these circumstances, it will be unjust and injudicious to subject the appellant to penalty, particularly when the appellant cleared the capital goods and paid duty at the depreciated value. Further, as the goods were cleared to its sister unit and duty paid would have been available to sister unit as credit, there could not have been any malafide on the part of the appellant. Indeed, in the appellants own case, CESTAT vide its order No.51934/2014 dated 15.04.2014 referred to earlie .....

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and of ₹ 81,62,763/- was confirmed along with interest and equal mandatory penalty was also imposed. The issue involved in this case is reversal of Cenvat credit on the capital goods when they were removed after use for some time. The appellant had acquired certain capital goods and took Cenvat credit thereon and after using them for about 3-6 years, cleared them to their sister unit in Bangalore reversing Cenvat credit as applicable on the depreciated value of the capital goods. The Commi .....

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. Ltd. vs. Commr. of Central Excise - 2012 (281) E.L.T. 714 (Del.) there was no provision during the relevant period for reversal of Cenvat credit taken on capital goods which were not removed as such, adding that the capital goods removed after use cannot be said to be removed as such. He, however, conceded that the Lager Bench of this Tribunal in the case of CCE, Hyderabad-III Vs. Navodaya Plastic Industries Ltd. - 2013 (298) ELT 541 (Tri.-LB) has departed from the judgment of Delhi High Court .....

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T vide final order No. 51934/14 has followed the Boards Circular dated 01.07.2002. 3. The ld. D.R. on the other hand stated that the appellant is located in Rajasthan and, therefore, the Larger Bench decision of CESTAT in the case of Novodaya Plastic Industries is squarely applicable and is binding and the amendment to Rule 3 (5) of Cenvat Credit Rules providing for reversal of cenvat credit based on the years of the use was made in 2007 while the period involved in this case is June & July, .....

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/2002-Ex. Dated 1.7.2002 prescribing deduction of 2.5% of credit for each quarter of use of machine year from date of taking of Cenvat credit is required to be followed. 5. Accordingly, i set aside the impugned order and remand the matter to the original adjudicating authority for arriving at the depreciated value of the capital goods in question inasmuch as I nowhere find as to how the depreciated value stands arrived at by the appellant. However, I do not find it a case of imposition of penalt .....

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ies (supra) departed there from and chose to follow judgment of Madras High Court. However, the appellant in this case is based in Rajasthan which is outside the jurisdiction of Delhi High Court. 5. Indeed the judgment of the Larger Bench of Tribunal in the case of Navodaya Plastic Industries (supra) which was passed in respect of a unit located in Andhra Pradesh/Telangana would be squarely applicable with binding force to the present appeal because the Larger Bench had taken note of judgment of .....

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