Depreciation before Cenvat credit reversal on used capital goods referred for Larger Bench resolution of conflicting views.

On removal of used capital goods on which Cenvat credit had been availed, the text highlights a dispute over whether depreciation can be allowed before requiring reversal of credit, and whether credit reversal must be proportionate. It also records a conflict between a Larger Bench view and a Division Bench view on these issues. The matter was referred to the Hon'ble President for constitution of a Larger Bench to resolve the conflicting interpretations and settle the depreciation and proportionate reversal questions.

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Issues: Whether, on removal of used capital goods on which Cenvat credit had been taken, depreciation could be allowed before requiring reversal of credit, and whether the conflicting views of a Larger Bench and a Division Bench required reference for resolution.

Outcome: The matter was referred to the Hon'ble President for constitution of a Larger Bench to resolve the conflict on the depreciation and proportionate reversal of credit issues.

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