2011 (4) TMI 837

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....ese two kilns vide retail invoices No.140 dated 15.01.07 and 141 dated 22.01.07 and paid duty of Rs.1,54,747/- on value arrived at by availing depreciation @ 2.5% per quarter for the period of 31/2 year instead of paying duty equal to the cenvat availed by them. Subsequently these two kilns were cleared on 15.01.07 and 22.01.07 and paid duty of Rs.1,54,747/- on the value arrived at after availing depreciation.   2. The Revenue asked the assessee to pay the differential amount of Rs.95,85/- as as per provisions of Rule 3(5) the capital goods removed as such will be on payment of an amount equal to the credit availed. The original adjudicating authority confirmed the demand and imposed a penalty. Against this order, the assessee went in....

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....Modvat/Cenvat Scheme, capital goods, whether used or unused, were allowed to be removed from a factory only on payment of duty or on reversal of Cenvat credit taken. Initially, used capital goods could be removed after reversing proportionate credit depending upon the period of use, as per Notification 23/94-C.E. dated 20-5-1994. This system was later changed to charging duty on used capital goods, cleared on the transaction value as per Notification 6/2001-C.E. dated 1-3-2001 and w.e.f. 13-11-2007 vide Notification 39/2007-C.E., the concept of reversal of proportionate credit has been reintroduced. If the expression as such is held to cover only unused or new capital goods, manufacturers who wish to remove used capital goods to job workers....

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.... 5. Basically the Revenue has raised two issues:   i). Whether the removal of capital goods in January 2007 after using them from three to four years, on payment of duty availing exemption is proper or not.   ii) Whether the show cause notice is hit by limitations or not.   6. It was the assessee s contention from beginning that they have cleared the two kilns on which they have paid the duty by availing depreciation under Circular No.643/34/2002-CX dated 01.07.02, which has clarified that adequate depreciation may be given on capital goods on which credit was taken after being used at the specified rate. Therefore the benefit of depreciation on goods removed from the factory after being used, as per rate specified in the....

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....ithout putting them to use:   i) M/s. Cummins India Ltd. Vs. CCE Pune-III [2007 (219) ELT 911 (Tri. Mumbai)]   ii) CCE Vapi Vs. M/s. Garden Plast P. Ltd. [2009 (233) ELT 468 (Tri. Ahmd.)]   7.3 Thus, I hold that the provisions of Rule 3(5) of the Rules that provides for reversal of entire/original amount of cenvat credit availed on inputs and capital goods when they are removed as such is not applicable in the present case. Further, there are no specific provisions which provide the manner of reversal of cenvat credit on removal/clearance of capital goods after putting them to use for three to four years, during the period in question i.e. January 2007. I find that similar situation has been clearly brought out and discuss....

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....hine sold. The decision of the Cummins India Ltd. (supra) was confirmed by the Hon ble High Court of Bombay. Relying on the same, the Tribunal passed the order in the case of CCE v. Raghav Alloy (P) Ltd. - 2009 (242) E.L.T. 124 (Tri.-Del.) = 2009 (93) RLT 603 (CESTAT-Del.) and CCE, Kanpur v. Geeta Inds. (P) Ltd. - 2010 (249) E.L.T. 99 (Tri. - Del.). Further the reliance by the learned DR in the case of Modernova Plastyles Pvt. Ltd. (supra) is not applicable to this case. As in the case of Modernova Plastyles Pvt. Ltd., the Tribunal in para 3 of the order has clearly observed that the decision of the Tribunal in the case of Cummins India Ltd. (supra) which has been upheld by the Hon ble High Court of Bombay only deals with the provisions of ....