2006 (8) TMI 452

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..... the capital goods purchased by them in the year 1994-95 for such manufacturing activity. Somewhere in September, 2000, the appellants decided to close down the section and shift the same to their another factory at Malanpur. They intimated to the Department vide their letter dated 16-9-2000 regarding the removal of such capital goods without payment of duty under the provisions of Rule 173 read with Rule 156A of the erstwhile CER, 1944. Having not received any response from the authorities, the appellant on their own removed the capital goods on 4-10-2000 and 6-10-2000 by using the AR-3A given by the Superintendent of Central Excise, Malanpur Range. The appellant was issued show cause notice on 24-1-2001 for the demand of the amount of cre .....

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..... h by both the sides and perused the records. I find from the records that it is not in dispute that the capital goods were removed from the appellant s unit to their own sister concern at Malanpur. The appellant had availed the Modvat credit in the year 1994-95 and confirmation of the demand of duty on the credit availed would be incorrect, It is a common knowledge that the capital goods which are used over a period of time get worned out and value gets depreciated as such the amount of duty sought to be demanded and confirmed against the appellants is incorrect, as the value of such capital goods is to be depreciated as per the Board s circular dated 26-5-93. Further, the whole issue is regarding the removal of the goods from the one unit .....

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..... tisfaction of the Commissioner. 6. It can be seen that the provisions of Rule 57AF may squarely apply in this case, as they provide for the transfer of credit if the assessee or manufacturer shifts his factory to another unit if that be so, the lower authorities have not considered this aspect while passing the orders. I also find strong force in the appellant s contention that if duty reversal of Cenvat credit is to be done, they are eligible to avail the Modvat credit in their unit at Malanpur, and I find that these are the very provisions in Rule 57AF. 7. Since the lower authorities have not considered the application of provisions of Rule 57AF in this case, to my mind, in the interest of justice, the matter has to be remanded back .....

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