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Hunsur Plywood Works (P) Ltd. Versus Commissioner of Central Excise, Mysore

Whether the appellant is liable to reverse cenvat credit on capital goods when the capital goods are removed after being used for a period of about one year also - Held that:- the capital goods was imported on 14.03.2006 and was used for a year and then cleared on 10.04.2007 without payment of duty under the belief that there was no provision in the Cenvat Credit Rules 2004 to pay cenvat either in full or depreciated amount of cenvat during the relevant period. By respectfully following the rati .....

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ourts on a particular issue, the extended period is not invocable. Therefore following the ratio in the above cited judgments, I hold that the show-cause notice in this particular case is beyond limitation and the demand is time-barred. - Decided in favour of appellant - E/2115/2010-SM - Final Order No.20638/2016 - Dated:- 17-8-2016 - Shri S. S. Garg, Judicial Member Shri M.S. Nagaraja, Advocate For the Appellant Shri N. Jagdish, AR For the Respondent ORDER Per S. S. Garg The present appeal is d .....

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availed credit of additional duty of customs on 23.03.2006 and 06.04.2006. The imported capital goods were installed and used but subsequently cleared the used capital goods under Invoice dated 10.04.2007 without payment of duty under the belief that there was no provision in the Cenvat Credit Rules 2004 either at the time of receipt in the factory and availing of credit or at the time of removal of used capital goods to pay cenvat either in full or depreciated amount of cenvat during the relev .....

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ppeal dated 26.08.2010 rejected the appeal filed by the appellant and upheld the Order-in-Original and aggrieved by the said order, the appellant is before the Tribunal. 2. The learned counsel for the appellant submitted that the impugned order is contrary to law and the precedents decided by various High Courts which have been ignored by the learned Commissioner while passing the impugned order. He further submitted that during the relevant period there was no provision to pay duty at the time .....

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he 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 and the same view was held by the Tribunal in the case of Madura Coats P. Ltd. Vs. CCE, Tirunelveli 2005 (190) E.L.T. 450. He further submitted that Hon ble High Court of Bombay has affirmed the said view as reported in .....

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lso submitted that the entire demand is beyond limitation because the show-cause notice was issued on 12.05.2009 whereas the used capital goods was cleared on 10.04.2007 by invoking the larger period of limitation. In support of the argument on limitation, he relied upon the following judgments: a) Jaiprakash Industries Ltd. Vs. CCE, Chandigarh 2002 (146) ELT 481 (SC) b) Continental Foundation Jt. Venture Vs. CCE, Chandigarh 2007 (216) ELT 177 (SC) 3. On the other hand the learned AR reiterated .....

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needs to be decided in this case is whether the appellant is liable to reverse cenvat credit on capital goods when the capital goods are removed after being used for a period of about one year also. It is pertinent to note that till the law was amended as on 13.11.2007 in respect of used capital goods, there was no liability to pay duty. In fact this is evident from the fact that in the Cenvat Credit Rules 2004, the proviso was added making the position clear which was not cleared in the earlier .....

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spect of capital goods which was used before it is removed. In the present case also, the capital goods was imported on 14.03.2006 and was used for a year and then cleared on 10.04.2007 without payment of duty under the belief that there was no provision in the Cenvat Credit Rules 2004 to pay cenvat either in full or depreciated amount of cenvat during the relevant period. The word as such used in the Cenvat Credit Rules has been the subject matter of interpretation by the various High Courts. 1 .....

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n Rule 3(5) of the Rules will not apply. 12. Bombay High Court in the case of Cummins India Ltd. v. Commissioner of Central Excise, Pune-III reported in 2007 (219) E.L.T. 911 (Tri.-Mumbai) confirmed the order of the Appellate Tribunal which has held as under : The plain and simple meaning of expression as such would be that capital goods are removed without putting them to use. Admittedly, in the present case capital goods have been used for a period of more than 7 to 8 years. As such, interpret .....

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ternational (Khaini) Pvt. Ltd. v. Commissioner of Central Excise reported in 2012 (281) E.L.T. 714 (Del.), after referring to the various judgments held as under : In the present case the appellant purchased the capital goods in the period between 2003 and 2005 and used them in its factory till they were sold to M/s. Harsh International (Khaini) Pvt. Ltd., in June and July, 2007. Thus the capital goods were used for a period of 2 to 4 years. They cannot, therefore, be stated, to be sold as such .....

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es 2004 as on 13.11.2007, in respect of used capital goods, there was no liability to pay duty and it was only with the addition of the proviso thereto that the situation changed. The learned AR has relied upon the judgments cited supra which has taken a contrary view then the judgments of the Karnataka, Bombay, Delhi and Punjab & Haryana High Court, but sitting in Bangalore I am bound by the judgment of jurisdictional High Court of Karnataka which has categorically held in the case of Solec .....

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