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M/s Kisan Irrigations Ltd. Versus Commissioner of Central Excise, Raigad

2016 (8) TMI 37 - CESTAT MUMBAI

Reversal of credit taken on capital goods - removal of capital goods after use of 10 years - period from 1.9.2004 to 13.11.2007 - Held that:- the appellants are only required to reverse the credit calculated in terms of CBE&C Circular cited above. If that is a case then the liability of the appellants is limited to around ₹ 10,000/- whereas they have already reversed over ₹ 97,000/-. In these circumstances, no demand can be sustained against the appellants. The appeal is accordingly .....

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availed on the said machinery in 1996 citing rule 3(5) of the Cenvat Credit Rules. 2. Learned Counsel for the appellant relied on the decision of the Tribunal in the case of Cummins India Ltd. 2007 (219) ELT 911 (Tri-Mum), which has been upheld by the Hon'ble Bombay High Court as reported in 2009 (234) ELT A120. In the said decision, it has been held that during the period 1.9.2004 to 13.11.2007 there was no provisions for reversal of credit taken on capital goods when they were cleared aft .....

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thorities below would lead to absurd results if an assessee is required to reverse the credit originally availed by them at the time of receipt of the capital goods, when the said capital goods are subsequently removed as old, damaged and unserviceable capital goods. This would defeat the very purpose of grant of facility of Modvat credit in respect of capital goods and would not be in accordance with the legislative intent. The same view was held by the Tribunal in the case of Madura Coats P. L .....

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g all the decisions held that the decision of Hon'ble Madras High Court in the case of Commissioner of Central Excise, Salem Vs. Rogini Mills Ltd. 2011 (264) ELT 367 (Mad) should be followed. In the said decision, Hon'ble High Court of Madras has held that when capital goods are cleared after use, the credit needs to be reversed at the depreciated value as prescribed under CBE&C Circular No. 643/34/2002-CX dated 1.7.2002. Learned Counsel argued that if duty is calculated in this mann .....

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