TMI Blog2019 (2) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... er amended by Notification No.39/2007-CE (NT) dated 30.11.2007, by which, a proviso was inserted to specify that in respect of clearance of capital goods, after being used, the manufacturer was required to reverse the amount equal to the cenvat credit taken, reduced by 2.5% for each quarter of year or part thereof - the period of dispute is prior to insertion of proviso above. The identical issue stands decided by the Hon’ble Karnataka High Court in the case of Solectron Centum Electronics Ltd. [2014 (10) TMI 596 - KARNATAKA HIGH COURT]. While ordering that there is no need for reversal of cenvat credit availed on capital goods, if cleared after use. There is no justification for imposition of any penalty on the Director, Shri Ashok K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for differential duty was confirmed by the original authority. The appeals filed against the Order-in-Original were also rejected by the Commissioner (Appeals) by passing the impugned order. This order is under challenge in the present appeals. 3. The appellant is represented by Shri Kartik Kurmy, ld.Advocate and Revenue is represented by Shri H.S. Abedin, ld.D.R. 4. The ld.Advocate submitted that Revenue is not justified in raising the demand for reversal of cenvat credit on clearance of such worn out Ingot Moulds for the following main reasons : (i) He took us through the provisions of Rule 3 (5) of the Cenvat Credit Rules, 2004 as it stood during the period of dispute i.e.2005-06 to 2006-07. Rule (3) and Rule 3(5) read as follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital goods are removed as such . Emphasizing the words as such , he submitted that the ingot moulds were removed after putting them to use repeatedly in the factory for manufacture. As such, the capital goods are cleared after they have exhausted their normal life and there is no requirement to reverse cenvat credit in respect of such clearance. (iii) He relied on the following decisions: (a) CCEx. Vs. Solectron Centum Electronics Ltd.: 2014 (309) ELT 479 (Kar.) ; (b) Cummins India Ltd. Vs. CCEx.: 2007 (219) ELT 911 (Tri.- Mum.) ; (c) Hans International (Khaini) Pvt. Ltd. Vs. CCEx. : 2012 (281) ELT 714 (Del.) ; (e) Greenply Indus. Ltd. Vs. CCEx.: 2010 (259) ELT 103 (Tri.- Del.). (iv) In view of the above, he submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ataka High Court in the case of Solectron Centum Electronics Ltd. (supra). While ordering that there is no need for reversal of cenvat credit availed on capital goods, if cleared after use, the Hon ble High Court of Karnataka, observed as follows: 9. The next question is whether the assessee was not liable to pay any duty when capital goods after it is being used was removed to the EOU unit. 10. Rule 3 sub-rule (4) of Cenvat Credit Rules, 2002 reads as under: (4) When inputs or capital goods, on which: CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods 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. 13. The Delhi High Court in the matter of Harsh International (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 yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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