2012 (9) TMI 637

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..... arts and availing the credit facility in respect of duty paid on inputs and capital goods. During the course of audit of the records, it was noticed by the audit that they had purchased the goods in the year 2001 and they had availed the credit of Rs. 1,60,611/-. In the year 2006, the appellants had sold those goods and discharged the duty liability of Rs. 57,446/- based on its depreciated value. The department took the view that the appellants were required to reverse the credit availed during the year 2001 in respect of the capital goods cleared 'as such' equal to the amount of credit at the time of receipt of the goods under Rule 3(5) of Cenvat Credit Rules, 2004. Accordingly a show cause notice was issued to the appellants which was con .....

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..... he assessee requires to be reversed under the then existing Rules. 5. Heard both sides and perused the records. 6. After hearing both sides, the only issue to be decided in this case is whether the entire credit availed by the appellants at the time of initial receipt of the goods in 2001 is required to be reversed or duty discharged by the assessee at the depreciated value in the year 2006 can be accepted without recovering any differential amount from them. Rule 3(5) of Cenvat Credit Rules, 2004 as it stood at the time of removal of the goods provided that the capital goods on which the credit taken are removed 'as such', the manufacturer of final product shall pay an amount equal to the credit availed in respect of such capit .....

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..... d and that has been elaborately discussed by the Tribunal in Geeta Industries case, which do not require any further elaboration. Besides as already pointed out above decision in that regard in Cummins India Limited has been upheld in recent judgment by the Bombay High Court. The decision of the Bombay High Court is binding upon the Tribunal. The decision of the Larger Bench is not directly on the issue involved in the matter. Hence, the point for consideration has to be answered in favour of the appellants. Being so, the impugned order cannot be sustained and is liable to be set aside while confirming that the duty liability in relation to the goods removed by the appellants was correctly assessed by the appellants and was paid appropriate .....

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