2016 (8) TMI 37

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.... Per Raju The appellants, M/s Kisan Irrigations Ltd., availed credit of certain capital goods in 1996 and after use of 10 years cleared the same in 2006 on payment of duty at transaction value of sale. A notice was issued to the appellant seeking to recover the entire credit availed on the said machinery in 1996 citing rule 3(5) of the Cenvat Credit Rules. 2. Learned Counsel for the appel....

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....he 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 originally 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 wou....

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....dras High Court in the case of Commissioner of Central Excise, Salem Vs. Rogini Mills Ltd.   2011 (264) ELT 367 (Mad) should be followed. In the said decision, Hon'ble High Court of Madras has held that when capital goods are cleared after use, the credit needs to be reversed at the depreciated value as prescribed under CBE&C Circular No. 643/34/2002-CX dated 1.7.2002. Learned Counse....

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.... that the Larger Bench of the Tribunal in the case of Navodhaya Plastic (supra) after examining the case law has observed as follows: - "10. The use of capital goods is to spread over many years. A decision to the effect that assessees can bring in capital goods, use it for a few days and then remove it without reversal of any Cenvat credit taken is not consistent with the overall scheme ....