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TMI Blog2023 (5) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of Cenvat Credit on capital goods cleared after some use. Similar case has been examined by Tribunal in the case of RAGHAV ALLOYS (P) LTD [ 2009 (4) TMI 184 - CESTAT, NEW DELHI ] wherein it was held that If the Department s view is accepted, it would lead to absurd results as even when the cenvated capital goods are cleared after long years of use at a small practice of their original value, still full Cenvat credit originally taken would be required to be reversed which would defeat the very purpose of grant of Cenvat credit facility in respect of capital goods. Hon ble High Court in the case of ROGINI MILLS LTD [ 2010 (10) TMI 424 - MADRAS HIGH COURT ] has also been examined similar issue and concluded that The capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s granted relief in identical circumstances by accepting the reversal of Cenvat Credit on the transaction value of the capital goods cleared. He also relied upon the decision of Tribunal in the case of COMMISSIONER OF C.EX., CHANDIGRAH Vs. RAGHAV ALLOYS (P) LTD-2009 (4) TMI 184 CESTAT, NEW DELHI wherein the similar relief has been granted. 3. Learned AR relies on the impugned order. 4. I have considered the rival submissions. I find that it is not in dispute that the capital goods on which the credit was availed, has been removed after some use. It is notice that Rule 3(5) and Rule 3(5A) Cenvat Credit Rules, 2004 deal with the obligation of a personal availing credit when that person removes the capital goods on which the credit has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which Cenvat credit has been taken, are cleared as such, the manufacturer will be required to pay an amount equal to the duty at the rate prevailing on the date of clearance and on value determined under the provisions of Section 4 of the Central Excise Act and in case of removal of used capital goods, as per the Board‟s circular No. 643/34/02-CX., dated 1-7-02, depreciation as per the rates fixed in the Board‟s letter No. 495/16/93-Cus.VI dated 26-5-93 was to be allowed. They took care of the situation like the one in this case where cenvated capital goods, after some use are cleared, as the Cenvat credit required to be reversed was the duty payable on the depreciated value. With effect from 13-11-07 a proviso wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken will be required. But if the capital goods are removed after some use, at a stage in between the unused and fully scrapped , they have not lost their identity as capital goods and since on removal of totally unused capital goods, full Cenvat credit is required to be reversed and on removal of unserviceable capital goods, removal as scrap, no Cenvat credit would be required to be reversed, in case of removal of used capital goods in between unused stage and scrap stage, when the capital goods, though used, have still retained their identity as capital goods, it would be logical to insist on reversal of Cenvat credit depending upon the extent of use, which would be more or less the duty chargeable on the depreciated value of the used c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment of Larger Bench of Tribunal in case of Modernova Plastyles Pvt. Ltd. v. CCE, Raigad (supra), as observed by the Tribunal in para 3 of the judgment, the case of M/s. Cummins India Ltd. has been distinguished from this case. Hon ble High Court in the case of ROGINI MILLS LTD has also been examined similar issue and came to the following conclusion:- 2. The brief facts, which are required to be stated, are that the first respondent is the manufacturer of cotton yarn, which avails cenvat credit facilities. They sold their Cenvat availed capital goods on payment of duty by adopting the transaction value at the time of subsequent sale instead of the value for which the Cenvat credit was originally taken on the inputs or capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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