TaxTMI 
TaxTMI 
2017 (11) TMI 995
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....2005 to March 2005 in two financial years. The said 16 Injection Moulding Machines were cleared later between December 2006 and March 2007 discharging the total duty of9,84,480/- on the transaction value of Rs. 60,00,000/- in terms of sub Rule 5 of Rule 3 of Cenvat Credit Rules, 2004. Alleging that the appellant had not reversed the credit availed on the said 16 Injection Moulding Machines but discharged less duty of Rs. 9,84,480/-, Show Cause Notice was issued to them for recovery of differential amount of Rs. 30,33,402/- with interest and penalty. On adjudication the demand was confirmed with interest and equal amount of penalty; also the capital goods was directed to be confiscated with an option to redeem the same on payment of fine of ....
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....issue should be decided in accordance with principle of law settled by the Larger Bench in Navodhaya Plastic Industries Ltd. case (supra). 3. Ld. Advocate, on the other hand, vehemently argued that the demand against the respondent was confirmed considering the clearance of capital goods were as such which was considered by the Ld. Commissioner (Appeals) as an invalid proposition/ ground for recovery of the entire amount of credit availed following the judgment of Hon'ble Bombay High Court in Commissioner vs Cumins (I) Ltd. - 2009 (234) ELT A120. Therefore, the Revenue cannot change its stand and bring out a new ground at this stage. 4. In his rejoinder, the Ld. AR for the Revenue has submitted that while deciding the appeal, the Ld. ....
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....Cenvat Credit Rules, 2004 the manufacturer was required to pay an amount equal to credit availed in respect of such capital goods. Taking note of the history of the provisions of reversal of credit on capital goods cleared after being put to use and referring to various decisions on the subject including the Bombay High Court in Cumin (India) Ltd.'s case, the Larger Bench of the Tribunal in Navodhaya Plastic Industries Ltd. case observed as follows: "5. However, on the question whether there is any need for reversal of any part of the credit that is taken has been answered differently in the above decisions. In the case of Cummins India credit reversed based on transaction value was approved by the Bombay High Court. This was a....
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....der Rule 57Q may be - (i) used in the factory of the manufacturer of the final products; or (ii) removed, after intimating the Assistant Commissioner of Central Excise, having jurisdiction over the factory and after obtaining dated acknowledgement of the same, from the factory for home consumption or for export, on payment of appropriate duty of excise leviable thereon or for export under bond, as if such capital goods have been manufactured in the said factory. (2) In a case, - (a) where a capital goods are removed without being used from the factory for home consumption, on payment of duty, or for export on payment of duty of excise, such duty of excise shall in no case be less than the amount of credit....
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....n Rule 3(5) ibid. Provided also that 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. 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 of Cenvat credit and can lead to abuse of the scheme. Considering this aspect and the legislative history and the Ci....