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2013 (10) TMI 348 - AT - Central ExciseDuty liability - Sale of used capital goods - Applicability of Rule 3(5) of the CENVAT Credit Rules, 2004 - Revenue contended duty liability together with interest and penalty on cenvat credit taken on capital goods - Held that - Following HARSH INTERNATIONAL (KHAINI) PVT LTD Versus COMMISSIONER OF CENTRAL EXCISE 2012 (6) TMI 340 - DELHI HIGH COURT - Appellant has used the capital goods in its factory for a period of 2 to 4 years, before selling - They cannot therefore be stated to be sold as such capital goods - They were sold as used capital goods - Rule 3(5) has no applicability when it removed the used capital goods - Appellant is not liable to the payment of duty, interest or penalty - the goods are not liable to be confiscated and ordered to be released without payment of any redemption fine and any penalty under Rule 25 of the Central Excise Rules, 2002 - Decided in favor of assessee.
Issues:
- Waiver of predeposit of duty and penalty under Rule 15 (2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. Analysis: The appellant filed an application seeking waiver of predeposit of duty amounting to Rs.3,24,011/- and an equal penalty imposed under Rule 15 (2) of the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. The appellant had purchased capital goods in 2004, used them, and subsequently sold them in April/July 2006 by paying duty on the transaction value. The Department demanded differential duty between the transaction value and the cenvat credit originally availed on the capital goods in 2004. The appellant relied on the judgment of the Hon'ble Delhi High Court in the case of Harsh International (Khaini) Pvt. Ltd. Vs. Commr. of Central Excise, where it was held that no duty was required to be paid when used capital goods were cleared before the amendment to Rule 3 (5) of the Cenvat Credit Rules, 2004. The appellant argued that their case was similar to the one decided by the Delhi High Court, and hence, they should not be liable to pay any duty. The Department, represented by the ld. A.R., could not present any contrary decision but reiterated the findings of the ld. Commissioner (Appeals). The Tribunal, after hearing both sides and examining the records, noted the decision of the Hon'ble Delhi High Court in the Harsh International case. The High Court had observed that capital goods used for a period of 2 to 4 years and then sold as used capital goods were not liable to pay excise duty under Rule 3(5). The Tribunal found that the facts of the present case were similar to the Harsh International case and that the appellant had made out a prima facie case for total waiver of predeposit. Consequently, the Tribunal granted the waiver of predeposit of all dues adjudged and stayed the recovery during the pendency of the appeal. The stay petitions were allowed, and the decision was dictated and pronounced in the open court.
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