Used CENVAT capital goods sold on transaction value: no further duty reversal was required beyond the amount already paid.

Sale of used CENVAT availed capital goods was treated as not attracting further duty on the facts, where the machinery had been used for about five years, sold to independent buyers, and duty had already been paid on the transaction value. The analysis also noted that the amended Rule 3(5) under Notification No. 39/07-N.T. provided a quarterly deduction formula for reversal, but the amount already paid exceeded the credit amount indicated by that formula. On that basis, no additional reversal of credit was required beyond the duty already discharged.

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Issues: Whether duty was payable on the sale of used CENVAT availed capital goods and whether the assessee was required to reverse the credit availed on such machinery.

Analysis: The machinery had been used for about five years and was sold to independent buyers. The impugned order relied on the consistent view that duty is not leviable on the sale of used capital goods. It also noted that the assessee had paid duty on the transaction value, which was treated as sufficient compliance. Further, Notification No. 39/07 - N.T., dated 13-11-07, amending Rule 3(5) of the CENVAT Credit Rules, 2005, provided a quarterly deduction from the credit amount, and the duty already paid on transaction value was higher than the amount indicated by the amended formula.

Conclusion: Duty was not exigible on the sale of the used capital goods in the facts of the case, and the assessee was not liable for any further reversal beyond what had already been paid.

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