2015 (10) TMI 1820 - AT - Central Excise

Reversal of CENVAT Credit - Removal of Capital goods - Held that - issue was decided by the Hon ble Madras High Court in the case of CCE, Salem vs. Rogini Mill Limited - 2010 (10) TMI 424 - MADRAS HIGH COURT , which was followed by the Larger Bench of the Tribunal in the case of CCE, Hyderabad vs. Navodhaya Plastic Industries Limited - 2013 (12) TMI 82 - CESTAT CHENNAI . The Hon ble Madras High Court in the case of Rogini Mill Limited (supra) held that in the case of removal of used capital goods, the depreciated value of such goods to be considered for reversing the cenvat credit availed thereon. - Impugned order is set aside - Matter remanded back - Decided in favour of Revenue.

Summary

Issues:
1. Reversal of cenvat credit on old and used capital goods by the respondents.

Analysis:
The judgment by the Appellate Tribunal CESTAT Ahmedabad dealt with the issue of reversal of cenvat credit on old and used capital goods by the respondents who were engaged in the manufacture of 'Paper and Paperboard'. The Revenue contended that the respondents should have reversed the full cenvat credit taken at the time of receipt of such capital goods when they cleared old and used capital goods in March/April 2004. The Tribunal referred to the decision of the Hon'ble Madras High Court in the case of CCE, Salem vs. Rogini Mill Limited and the Larger Bench of the Tribunal in the case of CCE, Hyderabad vs. Navodhaya Plastic Industries Limited. The Madras High Court in the case of Rogini Mill Limited held that the depreciated value of used capital goods should be considered for reversing the cenvat credit availed on them.

The Tribunal, after considering the precedents, set aside the impugned orders and referred the matter back to the adjudicating authority for a fresh decision. The Tribunal allowed all the appeals filed by the Revenue by way of remand, emphasizing that the adjudicating authority must consider the decision of the Madras High Court and the Tribunal's Larger Bench. It was also highlighted that the adjudicating authority must provide a proper opportunity of hearing to the Respondent before making a decision. The judgment concluded with the decision being dictated and pronounced in the Court by Mr. P.K. Das.

This judgment underscores the importance of following legal precedents and ensuring that the correct valuation method is applied when reversing cenvat credit on old and used capital goods. It also emphasizes the need for the adjudicating authority to provide a fair hearing to the parties involved before reaching a decision.