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TMI Blog2010 (3) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... wback. The appellant had imported capital goods in two consignments and cleared the same on payment of duties of customs including CVD. CENVAT credit of the CVD was taken by them. Subsequently, these capital goods were cleared under bond for export. In the relevant shipping bills, the appellant claimed drawback of the duty to the extent permitted under Section 74 of the Customs Act. In adjudication of the relevant show-cause notice, the original authority took the view that, as the capital goods were cleared for export shortly after the import, they were not intended to be used for manufacture of excisable goods and therefore the appellant was not entitled to avail CENVAT credit on such goods in terms of Rule 3(1) of the Cenvat Credit Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im under Sec.74 of the Customs Act to the reduced extent in relation to the capital goods reexported under Shipping Bills No.93 and No.94 dated 10.5.06. Needless to say that the assessee should be given a reasonable opportunity of being heard. The first appeal stands allowed by way of remand. 2. The records of the second appeal indicate that the assessee had indigenously procured both inputs and capital goods on which they took CENVAT credit. The inputs were used in the manufacture of final product. One of these inputs viz. ascorbic acid, on which CENVAT credit was taken on 22.1.03 on the strength of invoice dated 21.1.03 issued by the supplier (M/s. Hindustan Biologicals) was cleared as such from the factory on the same day under cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not in dispute that this input was cleared as such from the factory at a lower assessable value vis-`-vis the CENVAT credit taken thereon and that such clearance was effected on the same day on which the input was procured. In this scenario, the assessee ought to have paid duty equal to the CENVAT credit taken on the input as required under Rule 3(4) of the Cenvat Credit Rules, 2004. Instead, what they did was to pay duty at a lower assessable value at the time of clearance of the input on the same day on which it was procured. It is obvious that, in this conduct of the assessee, there was intent to evade payment of the differential duty. As regards the capital goods, it is the case of the assessee that the capital goods were removed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse the credit originally taken on the capital goods was held to be unsustainable. The appeal filed by the department against the Tribunal s order was dismissed on merits by the Hon ble High Court which observed that the view taken by the Tribunal is in consonance with law. Similar subsequent decisions of this Tribunal have also been cited by the ld.counsel. The ld.SDR has relied on Modernova Plastyles Pvt.Ltd vs. Commissioner of C.Ex.Raigad [ 2008(232) ELT 29 (Tri-LB)], wherein the Larger Bench was considering the expression as such occurring in Rule 4(5)(a) of the Cenvat Credit Rules, 2004. The Larger Bench held that reversal of credit availed on capital goods was required when the goods were removed, whether used or not. 4. After ..... X X X X Extracts X X X X X X X X Extracts X X X X
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