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of <h1>Tribunal rules in favor of appellants in capital goods dispute, emphasizing duty payment matching credit taken.</h1> The Tribunal set aside the Order-in-Appeal, ruling in favor of the appellants in a dispute concerning the removal of capital goods on which Modvat credit ... Cenvat/Modvat Issues:Challenge to Order-in-Appeal, Availing Modvat credit, Removal of capital goods, Duty payment on rejected goods, Invocation of interest and penalty, Interpretation of Rule 57AB(1), Quantum of credit availed, Duty payment on removed capital goods, Applicability of legal fiction.Analysis:The appellants contested the Order-in-Appeal upholding the rejection of their appeal regarding the removal of capital goods on which Modvat credit was availed. The dispute arose when the appellants removed certain capital goods, Gunning Mass and Whytheat Graphite Electrodes, by debiting only 50% of the duty amount in their Cenvat Credit Part II Register. The issue revolved around the duty payment on rejected capital goods as per the Explanation to Rule 57AB(1). The appellants argued that they paid duty equal to the credit availed when returning rejected goods to the original supplier, emphasizing no intention to evade duty. They relied on a judgment highlighting the restoration of the original duty position. The Revenue, however, contended that duty payment was necessary as per Rule 57AB(1) when capital goods are removed as such.The Tribunal analyzed the contentions and facts presented. It noted the undisputed removal of capital goods due to being unfit for use, with payment made to the original supplier equal to the credit availed. The Tribunal referenced Rule 57AB(1) and stressed the importance of the quantum of credit taken for duty payment on removed capital goods. It highlighted the requirement for duty payment not less than the credit amount allowed, aligning with the appellants' actions. Additionally, a similar provision under Rule 57S reinforced the duty payment principle. The Tribunal applied the legal fiction principle from a previous case to support its finding that no additional duty was warranted in the present scenario. Consequently, the impugned order was set aside, and the appeal was allowed, providing consequential relief if applicable.
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