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TMI Blog2014 (7) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... l amount of penalty. The Commissioner (Appeals) allowed the respondents appeal on the ground that the capital goods have been removed as such from the factory of the manufacturer and hence they have to pay an amount equal to the duty of excise which is leviable on the goods on the value determined under Section 4 of the Central Excise Act, 1944 read with Rule 3(4) of Cenvat Credit Rules, 2001, wherein he held that these provisions are not applicable to removal of used capital goods by relying the Tribunals decision in the case of Madura Coats Pvt. Ltd. Vs. CCE - 2005 (190) ELT 450 (Tri.). 2. The Ld. AR on behalf of the Revenue reiterated the grounds of appeal and submits that the lower appellate authority has not considered the Board's Ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value. 3. The Ld. Advocate on behalf of the respondent submits that the Commissioner (Appeals) has rightly allowed their appeal by relying the Tribunal orders in the case of Madura Coats Pvt. Ltd. Vs CCE and Salona Cotspin Ltd. Vs. CCE, Salem. He further submits that Rule 3 (4) is applicable in respect of the capital goods cleared as such and not applicable to the used cenvated capital goods. He relies on the decision of the single Member of this Tribunal in the case of CCE, Coimbatore Vs. L.G. Balakrishnan & Bros. - 2009 (238) ELT 659 (Tri. - Chen.), wherein it has been held that used capital goods are not capital goods 'as such' and no requirement to pay duty on sale of used capital goods. 4. Heard both sides and carefully considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken, are removed as such from the factory, the manufacturer of the final products, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 7.1. 6. In the first place, the provision for reversal of the Cenvat credit availed has been provided for under Rule 3(4)(C) of the 2004 Rules. When we peruse the order of the Principal Bench, New Delhi in its order reported in 2009 (242) ELT 124, we find a reference to the Board's Circular No. 643/34/2002-CX dated 01.07.02, a Boards letter bearing No. 495/16/1993-Cus.VI, dated 26.05.1993 and also a provision, which was added to Rule 3(5) of Cenvat Credit Rules 2004 (corresponding to Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Consequently, the interpretation put in the order of the Principal Bench reported in 2009 (242) ELT 124 merits acceptance. The order of the Tribunal impugned in this appeal applying the said ratio of the Principal Bench is, therefore, perfectly justified. The Hon'ble Madras High Court upheld the Tribunals decision that used capital goods are cleared after put into use, on which cenvat credit has been availed, the respondent discharged the duty on the depreciated value of the used capital goods in terms of the Board's Circular dated 01.07.02 read with CBEC letter dated 26.05.93. 6. Further, in the case of CCE, Hyderabad Vs. Navodhaya Plastic Industries Ltd.(supra), the Larger Bench of the Tribunal has held as under:- &n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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