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2014 (6) TMI 687 - AT - Central ExciseDenial of refund claim - Removal of the used capital goods without payment of duty - Subsequent reversal of the entire amount of credit originally taken on the said capital goods under protest - Held that - Reversal of CENVAT credit of 2.5% for each quarter of an year from the date of taking of CENVAT credit on capital goods. - matter should be examined in the light of the decision of the Larger Bench of the Tribunal in the case of Navodhaya Plastic Industries Ltd. (2013 (12) TMI 82 - CESTAT CHENNAI). Accordingly, I set aside the impugned orders and remand the matter back to the adjudicating authority to decide the matter afresh - Decided in favour of assessee.
Issues: Refund claim rejection under Rule 3(5) of CENVAT Credit Rules, 2004.
Analysis: The judgment involves the appellants, engaged in manufacturing IC Engines and parts, who removed used capital goods without payment of duty and subsequently reversed the credit taken on those goods under protest. The refund claim of duty was rejected by the adjudicating authority, a decision upheld by the Commissioner (Appeals). The impugned order stated that under Rule 3(5) of the CENVAT Credit Rules, 2004, the appellants were required to reverse the entire credit originally taken when receiving the capital goods. The judge referred to a decision by the Larger Bench of the Tribunal in the case of CCE Vs. Navodhaya Plastic Industries Ltd., which followed a ruling by the Hon'ble Madras High Court in the case of CCE Vs. Rogini Mills Ltd., stating that a 2.5% reversal of CENVAT credit for each quarter of a year from the date of taking the credit on capital goods was applicable. The judge, after considering the decision of the Larger Bench in the Navodhaya Plastic Industries Ltd. case, set aside the impugned orders and remanded the matter back to the adjudicating authority for a fresh decision. The adjudicating authority was directed to reconsider the case in light of the Larger Bench's decision. The judge emphasized that the appellant must be given a reasonable opportunity of hearing before a new order is passed. The judgment was dictated and pronounced in open court, ensuring transparency and due process in the legal proceedings.
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