2004 (4) TMI 517

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.... 11AB of the Central Excise Act, 1944. The facts of the case are that the appellants had removed different items of used textile machinery on 11-2-2002 and 2-5-2003. On the item cleared on 11-2-2002, the appellants paid duty on its value after applying depreciation on the purchase price of the item @ 2.5% per quarter of its use. On the other two items of machinery cleared on 2-5-2003, the appellants paid duty on the invoice value. 2. At the time of clearance of the first item, the relevant Rule 3(4) of Cenvat Credit Rules, 2000 read as follows :- "3(4) When inputs or capital goods on which CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the du....

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....emoval of used capital goods. In May 2003, they had cleared the capital goods on payment of duty on the invoice value which was in consonance with the CBEC's Circular No. 64/34/2002 dated 1-7-2002 which prescribed that when capital goods were removed on sale, transaction value shall be adopted for payment of duty. Ld. advocate also cited the decision of the Bangalore Bench of the Tribunal in the case of Madura Coats Pvt. .Ltd. v CCE, Tirunelveli [2005-TIOL-891-CESTAT-BANG] wherein the Hon'ble Tribunal held that assessees were not required to pay duty when they sold 'used capital goods'. The Tribunal held that Rule 3(4) of the Cenvat Credit Rules, 2001/2002 applied only to 'capital goods removed as such' i.e. new goods or goods which were no....