2017 (3) TMI 1501 - AT - Central Excise

Reversal of credit - the respondent sold old and used machinery without payment of duty, therefore, it was pointed out that the respondent is required to reverse cenvat credit on these capital goods in terms of Rule 3(5) of the CCR, 2004 - Held that - as per provisions of Rule 3(5) of the CCR, 2004, the asseessee required to reverse cenvat credit availed on the capital goods if they are cleared as such - Admittedly, in this case, the respondent has not cleared capital goods as such. Moreover, the capital goods have been acquired prior to 1994. This fact has not been disputed by the Revenue with any cogent evidence - provisions of Rule 3(5) of CCR, 2004 are not applicable to the facts of this case, assessee were not required to reverse cenvat credit at all as they have not taken cenvat credit. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Reversal of cenvat credit on capital goods cleared during March 2007 to October 2007.
2. Payment of duty on the sale of scrap iron and steel under Rule 3(5A) of Cenvat Credit Rules, 2004.

Analysis:
- The case involved the appeal by the Revenue regarding the demand of duty on the respondent for selling old and used machinery without payment of duty and clearing scrap of iron and steel without duty payment during a specific period.
- The Ld. Commissioner (A) dropped the demand against the respondent based on the respondent's contentions regarding the procurement of capital goods before 1994 and the nature of the scrap sales.
- The Revenue contended that as per Rule 3(5A) of the Cenvat Credit Rules, 2004, duty was required on dismantled material if cenvat credit was taken on input.
- The respondent produced a report certifying that no cenvat credit was taken on capital goods procured before 1994 and that the scrap sales were from dismantled old buildings.
- The Tribunal considered the arguments and evidence presented by both parties.
- It was found that the respondent did not need to reverse cenvat credit on capital goods under Rule 3(5) as they were not cleared as such and were acquired before 1994.
- Regarding the scrap sales, since the scrap was from dismantled old buildings and not from capital goods or manufactured goods, Rule 3(5A) did not apply.
- Consequently, the Tribunal upheld the decision of the Ld. Commissioner (A) and dismissed the appeal filed by the Revenue.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the arguments presented by both parties and the relevant legal provisions.