Cenvat credit reversal on removal of inputs as such upheld under Rule 3(4), with duty linked to removal date and value.

Duty on inputs removed as such after availing Cenvat credit is payable under Rule 3(4) of the Cenvat Credit Rules at the rate applicable on the date of removal, on the value determined under Section 4 or Section 4A. The Tribunal accepted that duty had been discharged at the correct rate and on transaction value, and held that the Commissioner's view matched the rule. It found no illegality in the appellate order interfering with the demand and penalty, and the challenge was rejected.

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Issues: Whether duty on inputs cleared as such after availing Cenvat credit was correctly determined under Rule 3(4) of the Cenvat Credit Rules, and whether the appellate order interfering with the demand and penalty suffered from any illegality.

Analysis: The Commissioner had held that, when inputs on which Cenvat credit had been taken are removed as such, duty is payable at the rate applicable on the date of removal and on the value determined under Section 4 or Section 4A of the Act, as contemplated by Rule 3(4) of the Cenvat Credit Rules. The Tribunal accepted that the duty was paid at the correct rate and on the transaction value, and found that the Commissioner's view was in accordance with the rule. On that basis, it concluded that there was no illegality in the order under challenge.

Conclusion: The demand and the appellate relief in favour of the assessee were not interfered with, and the appeal was rejected.

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