TaxTMI 
TaxTMI 
2010 (7) TMI 332
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on which it availed Cenvat credit of the CVD paid on the same. The CVD was paid on the purchase value of the machine at Rs. 13,02,717/-. After using the said machine for about 8 years, it was cleared on the transaction value of Rs. 3 lakhs and excise duty was paid on the same. A show-cause notice was issued to the appellant on 1-5-2007 demanding duty of Rs. 1,63,644/- being the difference between the credit originally taken in 1995 and duty paid at the time of clearance in 2003. Interest was demanded and penalty was also proposed. The department took a view that the appellant should have reversed the duty equivalent to the credit taken originally as per the provisions of Rule 2/Rule 3(4) Cenvat Credit Rules, 2002. Both the lower authoritie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....acks in the forgings produced by the said machine. The machine was not sold as such, it was sold as used machine. The provisions of Rule 3(4) of the Cenvat Credit Rules, 2002 are not applicable to this case. To support the contention, he placed reliance on Cummins India Ltd. v. CCE - 2007 (219) E.L.T. 911 (Tri. - Mumbai) wherein it was held that "as such" would be that capital goods are removed without putting them to use. The said order was confirmed by the Hon'ble High Court of Bombay reported in 2009 (234) E.L.T. A120 (Bom.). He further relied on CCE v. Raghav Alloy (P) Ltd. - 2009 (242) E.L.T. 124 (Tri.) = 2009 (93) RLT 603 (CESTAT-Del.) on the identical facts wherein the Tribunal held that the capital goods cleared in 2009 after used f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bunal held that the explanation as such not having any communication "as such" to be interpreted as commonly understood, which is in the "original form" and without any addition, alteration or modification. The CENVAT credit availed is to be reversed when capital goods removed whether used or not. He further submitted that in case of Modernova Plastyles Pvt. Ltd., although the issue in respect of Rule 4(5)(a) of Cenvat Credit Rules, 2004 and in this case the issue involved with regard to Rule 3(4) of Cenvat Credit Rules, 2002 the common word defined by the Tribunal is "as such". No different meaning can be given in different rules of the same statute. Hence the credit is not available to the appellant. He further submitted that the goods we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y invoked. The Commissioner (Appeals) has relied on the decision of the Madura Coats Pvt. Ltd (supra) and confirmed the demand with regard to the limitation. He also found that there was suppression of facts as no intimation of clearance was given until detected by the Department. In this case, I find that the appellant has filed their ER1 return regularly and in the returns for the year 2003 it is clearly mentioned that removal of capital goods worth Rs. 3 lakhs and duty was paid thereon. This fact was well within the knowledge of the department. Moreover during the course of Audit on 21-1-2006, the query was raised and the appellant filed the reply on 17-2-2006. As per para 3 of the reply, the appellant has stated as under :- "Purporte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are removed without putting them to use. Admittedly, in the present case capital goods stand used for a period of more than 7 to 8 years. As such, the interpretation given by the authorities below would lead to absurd results if an assessee is required to reverse the credit original availed by them at the time of receipt of the capital goods, when the said capital goods are subsequently removed as old, damaged and unserviceable capital goods. This would defeat the very purpose of grant of facility of Modvat credit in respect of capital goods and would not be in accordance with the legislative intent." Further, in the case of Madura Coats Pvt. Ltd. (supra) the Tribunal has held that "the Board Circular dated 1-7-2002 is applicable only when ....