2012 (4) TMI 159 - AT - Central Excise

Clearance of capital goods on which Cenvat credit was taken after using the same for about seven years - Revenue contented that as per Rule 3(5) of Cenvat Credit Rules the assessee should have reversed the entire credit taken when the capital goods were initially received in the factory - whereas the contention of the appellant is that when capital goods are removed after use it is not clearance of the goods as such - Held that - the said rule cannot be interpreted to cover clearance of capital goods after its use and reversal of Cenvat credit based on transaction value of the capital good is good enough as decided in CCE Vs. Raghav Alloys Ltd - 2010 - TMI - 77070 - PUNJAB & HARYANA HIGH COURT - in favour of assessee.

Summary

The dispute involved clearance of capital goods with Cenvat credit taken after seven years. The appellant reversed credit based on transaction value when goods were sold after use. Revenue argued for reversal of entire credit initially taken. Tribunal followed Punjab & Haryana High Court ruling that credit reversal based on transaction value after use is sufficient. Appeal allowed.