2016 (7) TMI 1199

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....n the capital goods when they were removed after use for some time. The appellant had acquired certain capital goods and took Cenvat credit thereon and after using them for about 3-6 years, cleared them to their sister unit in Bangalore reversing Cenvat credit as applicable on the depreciated value of the capital goods. The Commissioner (Primary Adjudicating Authority) held that the entire amount of Cenvat credit taken at the time of acquisition of these capital goods was required to be paid (reversed) at the time of clearance of these goods as capital goods were removed as such i.e. as capital goods and not as scrap. 2. Ld. Advocate for the appellant contends that capital goods removed after use cannot be said to be removed as such and ....

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.... of the use was made in 2007 while the period involved in this case is June & July, 2005. 4. We have considered the contentions of both sides. At the outset we would like to mention that is the appellant's own case involving identical issue for an earlier period CESTAT vide final Order No. 51934/14 dt.15.04.2014 held as under:- "4. It stands held that the requirement of reversal of entire credit is only when the capital goods are removed "as such". Where the same are cleared after continuous use in a number of years, the depreciated value in terms the board's circular No. 643/34/2002-Ex. Dated 1.7.2002 prescribing deduction of 2.5% of credit for each quarter of use of machine year from date of taking of Cenvat credit is required....

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.... and also some other High Courts and held that the reversal of cenvat credit in accordance with the CBEC Circular dated 01.07.2002 represented the correct position in law. Indeed in the wake of said judgment this Tribunal has already passed an order dated 30.04.2014 in the appellants own case involving the same issue for a different period. 6. It is evident that on the issue involved in this case, Delhi High Court and Chennai High Court had taken different views. As per Delhi High Court, no cenvat credit was required to be reversed when capital goods were cleared after use. In these circumstances, it will be unjust and injudicious to subject the appellant to penalty, particularly when the appellant cleared the capital goods and paid dut....