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2016 (11) TMI 475 - CESTAT ALLAHABAD

2016 (11) TMI 475 - CESTAT ALLAHABAD - TMI - CENVAT credit - capital goods cleared after use - Held that: - the appellant was not required to pay excise duty that is in another words debit of Cenvat credit taken at the time of receipt of said capital goods under Rule 3(5) of Cenvat Credit Rules, 2004 while removing the said capital goods after use. Therefore, I set aside the Order-in-Appeal and allow the appeal. The appellant shall be entitled for consequential relief, in accordance with law. - .....

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cts of the case are that the appellant was issued with a Show Cause Notice dated 28/05/2008 wherein it was proposed to recover an amount of ₹ 11,17,731/- which was equal to the amount of Cenvat credit availed in respect of capital goods cleared after use under invoice No. 01 dated 22/05/2007 to their another Unit at Banglore. The said Cenvat credit was availed during the period from 1997-98 and the capital goods were cleared in 2007 and the said Show Cause Notice invoked provisions Rule 3( .....

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e treated as removed as such. They relied on various case laws to support their claim including in the case of Cummins India Ltd. Versus Commissioner of Central Excise, Pune-III reported at 2007 (219) E.L.T. 911 (Tri. - Mumbai). The Original Authority did not appreciated the arguments and confirmed the demand of ₹ 11,17,731/- and imposed equal penalty. Aggrieved by the said Order-in-Original No. 27/Additional Commissioner/Noida/2009 dated 16/04/2009, appellant preferred appeal before Commi .....

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they were removed to their another Unit at Banglore under invoice No. 1, dated 22/05/2007. It is very clearly stated in the invoice that the removal was stock transfer. He has further relied on ruling by Hon ble High Court of Delhi in the case of Harsh International (Khaini) Pvt. Ltd. Versus Commissioner of Central Excise reported at 2012 (281) E.L.T. 714 (Delhi). Referring to the ruling in Para 13, 14 & 15 of the said ruling of Hon ble High Court of Delhi, he has argued that the case is squ .....

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ruled in the Para 13, 14 & 15 of case law as follows:- 13. M/s Harsh International Pvt. Ltd. admittedly sold the capital goods in June and July, 2007 to M/s Harsh International (Khaini) Pvt. Ltd. The dates of sale thus fall prior to the amendment made with effect from 13/11/2007. The Tribunal has rightly pointed out that the case of Harsh International Pvt. Ltd., fall under Rule 3(5) as it stood amended from 06/05/2005 but before being amended on 13/11/2007. However, we note that the view ta .....

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en interpreted by the Punjab & Haryana High Court in Commissioner of Central Excise, Chandigarh Versus Raghav Alloys Ltd., 2011 (268) E.L.T. 161 (P & H) = 2012 (26) S.T.R. 87 (P & H) to refer to unused capital goods and do not take in the used capital goods. It has been observed as under:- 8. We have heard arguments of both the ld. Counsel. The Tribunal has rightly noted that unlike inputs, which get consumed 100% with the same are taken up for use in relation to manufacture of finis .....

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provided that if the machines are cleared as such the Assessee shall be liable to pay duty equal to amount of Cenvat Credit availed. The machines which are cleared after utilization cannot be treated as machines cleared as such. With effect from 13/11/2007, a proviso has been added to Rule 3(5) of the Cenvat Credit Rules providing that if the capital goods on which Cenvat Credit has been taken are removed after being used, the manufacturer shall pay the amount equal to Cenvat Credit taken on the .....

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g into use for nine years canot be treated as Cleared as such . Insertion of proviso w.e.f. 13/11/2007 makes it clear that there is difference between machines cleared without putting into use and cleared after use. The Bombay High Court has upheld the view of the Tribunal in the case of Cummins India Limited Versus Commissioner of Central Excise, Pune-III, 2007 (219) E.L.T. 911 (Tri. Mumbai). The Tribunal in the case of Nahar Fibres has also dismissed Appeal of the Revenue and there is nothing .....

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