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TMI Blog2016 (9) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. On the basis audit observation, Show Cause/Demand Notice was issued to the appellant on 22.6.2007 alleging that even though the appellant has sold their plant and machinery to M/s Technova Imaging Systems (P) Ltd against commercial Invoice dt 30.6.2006 for Rs. 7,85,00,000/- and possession thereof was handed-over to the purchaser, but the Cenvat Credit of Rs. 18,03,635/- involved on the said capital goods were not reversed in contravention of the Rule 3(5) of Cenvat Credit Rule 2004. On adjudication, the demand notice was confirmed and penalty of equal amount imposed under Rule 15 of CCR, 2004 read with Section 11AC of Central Excise Act 1944. Aggrieved by the said order, the appellant filed an appeal before the Ld Commissioner (Appeal), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods are sold after its use in the factory, the Ld AR submitted that the depreciated value of the plant and machinery should be considered for reversal of the Cenvat Credit and not the value at which the same were procured in view of the decision of the Larger Bench of this Tribunal in Navodhaya Plastic Industries Ltd reported in 2013(298)ELT.541 (Tri.LB) and the judgment of the Hon'ble Madras High Court in the case of CCE, Salem Vs Rogini Mills Ltd 2011(264)ELT.367 (Mad). 5. Heard both sides and perused the records. I find that the appellant had through the commercial invoice dt 30.6.2006 sold the plant and machinery installed at their factory to one M/s Technova Imaging Systems (P) Ltd. The invoice contains the details of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid ratio of the Hon'ble Karnataka High Court has been followed in J K Paper s case(supra) by this Tribunal. Also, an appeal filed by the assessee before the Hon'ble Supreme Court against the said order of Hon'ble Karnataka High Court, the same was dismissed. Regarding the issue of demanding the entire Cenvat Credit used on capital goods treating the same as such , I do not find merit in the order of the Lower Authority, in view of the Larger Bench decision of this Tribunal in the case of Navodhaya Plastic Industries Ltd (supra). In the said judgment it has been held that the depreciated value of the capital goods be considered in calculating amount of credit require to be reversed. It is observed as: " 7. During 1-9-2004 to 13-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remove it without reversal of any Cenvat credit taken is not consistent with the overall scheme of Cenvat credit and can lead to abuse of the scheme. Considering this aspect and the legislative history and the Circular of C.B.E. & C., we are of the view that we should respectfully follow the decision of the Hon'ble Madras High Court in the case of Commissioner of Central Excise, Salem v. Rogini Mills Ltd. (supra) and the reference made to this Larger Bench is answered accordingly." 7. In the result, the impugned order is set aside and the matter is remanded to the Adjudicating Authority to re-determine quantum of Cenvat Credit by taking into consideration the depreciation allowed under the relevant rules as laid down in Navodhaya Plastic I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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