Removal "as such" under CENVAT rules does not cover old, used capital goods cleared after being put to use.

Old and used capital goods cleared after use from a factory were held not to be removed "as such" for purposes of Rule 3(4) of the Cenvat Credit Rules, 2002. The expression "as such" was construed to mean removal without first being put to use, so capital goods that had been deployed in the factory could not attract reversal or duty under that charging provision. Clearance on transaction value did not change that position, and the demand was therefore unsustainable.

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Issues: Whether old and used capital goods cleared from the factory after use could be treated as removal "as such" so as to attract duty under Rule 3(4) of the Cenvat Credit Rules, 2002.

Analysis: The capital goods were received in the factory in 1995 and were admittedly put to use before clearance. Rule 3(4) applies where inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory. The expression "as such" was understood to mean removal without putting the goods to use. Since the goods in question were old and used, their clearance on transaction value did not amount to removal as such, and the charging provision could not be invoked.

Conclusion: Rule 3(4) of the Cenvat Credit Rules, 2002 was not attracted and the demand was not sustainable.

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