TaxTMI 
TaxTMI 
2016 (8) TMI 751
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....nd other articles of wood falling under Chapter 44 of the first schedule to CETA 1985. The appellant imported Full Power Double Side planner without spiral cutters vide Bill of Entry No. 117177 dated 14.03.2006 and availed credit of additional duty of customs on 23.03.2006 and 06.04.2006. The imported capital goods were installed and used but subsequently cleared the used capital goods under Invoice dated 10.04.2007 without payment of duty under the belief that there was no provision in the Cenvat Credit Rules 2004 either at the time of receipt in the factory and availing of credit or at the time of removal of used capital goods to pay cenvat either in full or depreciated amount of cenvat during the relevant period. Thereafter a show-cause ....
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....al 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 and the same view was held by the Tribunal in the case of Madura Coats P. Ltd. Vs. CCE, Tirunelveli 2005 (190) E.L.T. 450. He further submitted that Hon'ble High Court of Bombay has affirmed the said view as reported in 2009 (234) ELT A120 (Bom.) holding that view taken by the Tribunal is in accordance with the law and no question of law arises in the appeal. Further in support of his submission he relied upon the following case-laws: a) CCE, Bangalore II Vs. Solectron Centum Electronics Ltd. ....
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....to note that till the law was amended as on 13.11.2007 in respect of used capital goods, there was no liability to pay duty. In fact this is evident from the fact that in the Cenvat Credit Rules 2004, the proviso was added making the position clear which was not cleared in the earlier provision. The proviso reads thus: "If the capital goods, on which cenvat credit has been taken are removed after being used, the manufacturer or provider of output service shall pay an amount equal to the cenvat credit taken on the said capital goods reduced by 2.5 per cent for each quarter of a year or part thereof from the date of taking the cenvat credit." The above said provision was added by a Notification No. 39/2007 dated 13.11.2007. Theref....
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....pital goods have been used for a period of more than 7 to 8 years. As such, 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 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." 13. The Delhi High Court in the matter of Harsh International (Khaini) Pvt. Ltd. v. Commissioner of Central Excise reported in 2012 (281) E.L.T. 714 (Del.), after referring to the various judgments held as....
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....l goods. Therefore respectfully following the ratio of the Karnataka High Court, I hold that the impugned order is not sustainable in law and I set aside the same. As far as limitation is concerned, the learned counsel submitted that show-cause notice was issued on 12.05.2009 proposing to demand cenvat on clearance of used capital goods on 10.04.2007 by invoking the larger period of limitation; which is unsustainable in law. He also submitted that the appellants have followed the judgments of various High Courts wherein it has been held that there is no liability to pay cenvat on clearance of used capital goods prior to 13.11.2007. Therefore, there cannot be any suppression of facts of availing credit or contravention of the provisions of C....