9911796707
TMI Blog2010 (4) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... set to their another plant situated at Nalagarh, District Solan (H.P.). The show cause notice was issued proposing demand of duty of Rs. 4,58,640/- being an amount originally taken as credit along with interest and proposing penalties under Rule 15(1), 15(2) of Cenvat Credit Rules, 2004 and Rule 25 of Central Excise Rules, 2002 for the alleged contravention of Rule 3(5) of Cenvat Credit Rules. The original authority confirmed the demand and imposed penalty of Rs. 50,000/- under Rule 15(1) of Cenvat Credit Rules, penalty of Rs. 4,58,640/- under Rule 15(2) of Cenvat Credit Rules and penalty of Rs. 50,000/- under Rule 25 of Central Excise Rules, 2002. On appeal, the Commissioner (Appeals) sustained the demand of duty and the penalty imposed un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Cenvat Credit Rules. 5. Learned DR submits that inasmuch as the DG set has been cleared as DG set, the entire amount of credit originally taken along with interest is recoverable and penalty is also imposable. 6. I have carefully considered the submissions from both sides. Undisputedly, the DG set has been received in 1997 and credit has been taken in 1997 and there is no dispute about the correctness of the credit taken as capital goods. It is also not in dispute that the appellant has used the DG set for the intended purpose for about eight years. No doubt, the DG set has been cleared as DG set to their other unit. According to the Department in spite of long usage, inasmuch as the DG set has been cleared as DG set, such clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tios involved in the above decisions, I hold that it would be appropriate to direct the appellant to pay the amount of duty on the depreciated value as envisaged in the proviso to Rule 3(5) of Cenvat Credit Rules, 2004. 8. In the given facts and circumstances of the case, it can not be held that credit availed by the appellant initially was irregular. The issue involved is whether credit has to be reversed at the time of clearance after use of the capital goods for several years. Under these circumstances, the question of sustaining penalty imposed under Rule 15(2) of Cenvat Credit Rules does not arise. 9. In view of the above, the appeal is disposed of by directing the appellant to pay the duty on the depreciated value and interest app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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