TMI Blog2023 (12) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... r a situation where such capital goods are removed as such from the factory or premises of the provider of output service. Rule 3(5A) deals with a situation when such capital goods are cleared as waste and scrap . It is apparent that both the provisions of Rules 3(5) and (5A), are concerned with capital goods on which Cenvat credit has been taken. As the Appellant has not availed any credit on these rejected capital goods cleared as scrap, we hold that the provisions of Rule 3(5) and 3(5A) are not applicable in this case - the demand of duty confirmed in the impugned order is not sustainable. Since, the demand of duty itself is not sustainable, the question of demanding interest or imposing penalty does not arise. The impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee indicated that the said old/used machineries disposed of were purchased well before the introduction of Capital Goods Credit Scheme under the then Modvat Credit Scheme in the Central Excise Rules, 1944 with effect from March 1, 1994. As such, the Appellant contended that on sale of the said old and used machineries through auction as rejected/scrap goods, there was no requirement of either reversal of the Cenvat credit availed on the said goods in terms of Rule 3(5) of the Cenvat Credit Rules, 2004 or to make payment of Central Excise duty on the transaction value thereof as per Rule 3(5A) of the Cenvat Credit Rules. 3. Pursuant to an audit objection raised by the Department in the course of audit of the records of BSP, for the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers to the capital goods on which Cenvat credit has been taken. Rule 3(5) provides for a situation where such capital goods are removed as such from the factory or premises of the provider of output service. Rule 3(5A) on the other hand provides for a situation when such capital goods are cleared as waste and scrap . It is apparent that both the provisions of Rules 3(5) and (5A), are concerned with capital goods on which Cenvat credit has been taken. This would be evident from the Instructions issued by Board in F. No. 267141/09-CX.8 dated December 7, 2009, wherein it has been clarified that Rule 3(5A) of the Cenvat Credit Rules is applicable only to capital goods on which Cenvat credit has been taken and which are cleared as waste and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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