Cenvat credit rule on removal of used capital goods excludes items already put to use, defeating Revenue's stay request.

Rule 3(4) of the Cenvat Credit Rules, 2002 applies to capital goods removed as such on transaction value, not to capital goods removed after being put to use. On that basis, the text states that duty was not payable on removal of used capital goods after six years of use. The Board circular cited for the Revenue did not change the position adopted in the Tribunal decisions relied on, and the order dropping the demand was found to disclose no prima facie infirmity. The Revenue's stay application was therefore rejected.

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Issues: Whether duty was payable on removal of used capital goods after six years of use, and whether the Revenue had made out a case for stay against the order dropping the demand.

Analysis: Rule 3(4) of the Cenvat Credit Rules, 2002, as applicable at the time, required payment of duty when capital goods were removed as such on transaction value. The removal in question was of capital goods after use, and the order relied on the view that such removal was outside the scope of the rule. The Board circular cited on behalf of the Revenue did not alter the position adopted in the relied upon Tribunal decisions. On this prima facie view, no infirmity was seen in the order under challenge.

Conclusion: Duty was not required to be paid on removal of the used capital goods, and the Revenue's stay application was rejected.

Ratio Decidendi: Rule 3(4) of the Cenvat Credit Rules, 2002 applies to capital goods removed as such, and not to capital goods removed after being put to use.

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