2012 (11) TMI 257 - AT - Central Excise

Tribunal Upholds Duty of Rs. 12,51,200 for Cenvat Credit Reversal on Old Capital Goods

The Tribunal confirmed a duty of Rs. 12,51,200 against the appellant for the reversal of Cenvat credit on the removal of old capital goods. The decision ... Waiver of pre-deposit - Cenvat credit - Duty demanded on the ground that at the time of removal of old and used capital goods, the appellant is required to reverse the total Cenvat credit availed by them at the time of receipt of the said capital goods – Held that:- In the case of Raghav Alloys (P) Ltd. (2009 (4) TMI 184 - CESTAT, NEW DELHI ) it was held that words 'as such' in the Rule 3(4) of Cenvat Credit Rules, 2002 means that capital goods removed without putting them to use and that when the capital goods are removed after use for a period of 7 to 8 years, they cannot be said to have been removed as such – waiver of pre-deposit allowed Issues involved:Confirmation of duty against the applicant for reversal of Cenvat credit on removal of old capital goods.Analysis:1. The Tribunal confirmed a duty of Rs. 12,51,200 against the appellant for the reversal of Cenvat credit on the removal of old capital goods. This issue was found to be covered by various decisions of the Tribunal. Reference was made to the decision in Cummins India Ltd. v. C.C.E., Pune-III, which was confirmed by the Hon'ble Bombay High Court. Additionally, the Tribunal's decision in C.C.E., Chandigarh v. Raghav Alloys (P) Ltd. was cited, which was confirmed by the Hon'ble High Court of Punjab and Haryana. These decisions supported the Tribunal's stance on the matter.2. The Tribunal noted that the Larger Bench decision in Modernova Plastyles Pvt. Ltd. v. C.C.E., Raigad, which held a contrary view, was considered by the High Court of Punjab & Haryana but not agreed upon. Given conflicting decisions, the Tribunal decided to follow the decisions of the High Court in the cases of Cummins India Ltd. and Raghav Alloys (P) Ltd. Consequently, the Tribunal dispensed with the condition of pre-deposit of all dues in the present case and allowed the stay petitions unconditionally.3. Recognizing that the appeal involved a short issue covered by precedent decisions of the Tribunal, the Tribunal scheduled the appeal for final disposal on 24-4-2012. This step indicated the Tribunal's intention to resolve the matter conclusively based on the existing legal precedents and decisions cited in the case.This detailed analysis of the judgment highlights the key legal arguments, references to precedent decisions, and the Tribunal's approach to resolving the issues at hand.