2023 (5) TMI 932

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....fore the same work removed. He also pointed out that proviso of Rule 3 (5A) would also not be applicable to the appellant's case as the goods has not been removed as waste and scrap. He pointed out that in the case of COMMISSIONER OF C. EX.,K SALEM Vs. ROGINI MILLS LTD.-2010 (10) TMI 424 - Hon'ble Madras High Court has granted relief in identical circumstances by accepting the reversal of Cenvat Credit on the transaction value of the capital goods cleared. He also relied upon the decision of Tribunal in the case of COMMISSIONER OF C.EX., CHANDIGRAH Vs. RAGHAV ALLOYS (P) LTD-2009 (4) TMI 184 -CESTAT, NEW DELHI wherein the similar relief has been granted. 3. Learned AR relies on the impugned order. 4. I have considered the rival submiss....

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.... was no Rule for reversal of Cenvat Credit on capital goods cleared after some use. 5. I find that similar case has been examined by Tribunal in the case of RAGHAV ALLOYS (P) LTD wherein the following has been observed:- "4.During the period prior to 1-3-03, Rule 3(4) provided that where inputs or capital goods, in respect of which Cenvat credit has been taken, are cleared as such, the manufacturer will be required to pay an amount equal to the duty at the rate prevailing on the date of clearance and on value determined under the provisions of Section 4 of the Central Excise Act and in case of removal of used capital goods, as per the Board‟s circular No. 643/34/02-CX., dated 1-7-02, depreciation as per the rates fixed in ....

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....r a period of time. The capital goods lose their identity as capital goods only when after use over a period of time, the same have become unserviceable and fit to be scrapped and if they are cleared at that stage, the same cannot be said to have been cleared as such and in such a situation, the reversal of Cenvat credit taken will be required. But if the capital goods are removed after some use, at a stage in between the "unused" and "fully scrapped", they have not lost their identity as capital goods and since on removal of totally unused capital goods, full Cenvat credit is required to be reversed and on removal of unserviceable capital goods, removal as scrap, no Cenvat credit would be required to be reversed, in case of removal of used....

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....nce, the credit originally taken is not required to be reversed and payment of an amount equal to the duty on the sale price of such used capital goods would meet the requirement of the law. This judgment has been upheld by Hon‟ble Bombay High Court vide judgment reported in 2009 (234) E.L.T. A120. 5.As regards the judgment of Larger Bench of Tribunal in case of Modernova Plastyles Pvt. Ltd. v. CCE, Raigad (supra), as observed by the Tribunal in para 3 of the judgment, the case of M/s. Cummins India Ltd. has been distinguished from this case." Hon'ble High Court in the case of ROGINI MILLS LTD has also been examined similar issue and came to the following conclusion:- "2. The brief facts, which are required to be ....