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TMI Blog2024 (8) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... sly used the words from the date of availing the credit . It has not used the words from the date on which the capital goods were put to use or from the date of receiving the capital goods in the factory. It can be seen that the date of availing the credit has been made the relevant date for applying the deduction of 2.5%. The appellant has sought to apply the deductions on 100% from the date of availing the initial credit itself. It may be true that though capital goods are received at the same time, Rule 4 (2) restricts the availment of credit to 50% of the duty paid on capital goods in a financial year. The legislature while introducing Rule 3 (5A) was fully conscious of the existence of Rule 4 (2) also. Nothing can be read to be added in to the provisions of law, when the ordinary meaning does not give rise to any ambiguity. Though the Ld. Consultant relied upon the decision in the case of MAHINDRA UGINE STEEL CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE ST, NASHIK [ 2019 (2) TMI 755 - CESTAT MUMBAI ], the facts of the case are not so clear as to whether the issue considered is the same. Time Limitation - HELD THAT:- Though department has invoked the extended period there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in rule 9; Provided that such payment shall not be required to be made where any inputs [ or capital goods) are removed outside the premises of the provider of output service for providing the output service: Provided also that if the capital goods, on which CENVAT credit has been taken, are removed after being used, the manufacturer or provider of output service shall pay an amount equal to the CENVAT credit taken on the said capital goods reduced by 2.5 percent for each quarter of a year or part thereof from the date of taking the Cenvat Credit. With effect from 17.03.2012 Rule 3(5A) Cenvat Credit Rules, 2004 read as follows: Rule 3 (5A) If the capital goods, on which CENVAT credit has been taken, are removed after being used, whether as capital goods or as scrap or waste, the manufacturer or provider of output service shall pay an amount equal to the CENVAT credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of taking the CENVAT credit, namely:- (a) .. (b) for capital goods, other than computers and computer peripherals 2.5ts for each quarter. Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50% credit in the first financial year and balance 50% was availed in the subsequent financial year. The provision states that the depreciation has to be calculated from the date of availing the credit. According to department, the appellant cannot avail 2.5% depreciation on the entire 100% of the credit and instead is eligible to avail depreciation of 2.5% on 50% from the date of availing the initial credit. Thus, the appellant had reversed / paid less duty while removing the used capital goods. A show cause notice for the period September 2011 to November 2012 was issued to the appellant raising a demand of Rs.57,25,245/- being the Cenvat credit that has to be reversed on various capital goods removed during the disputed period. After due process of law, the original authority confirmed the demand, interest and imposed penalties. Aggrieved by such order, the appellant has preferred this appeal. 3. The Ld. Consultant, Shri M. Saravanan, appeared and argued for the appellant. The appellant had cleared the used capital goods from their Ring and Spindle unit to Unit 1 after deducting 2.5% per quarter of usage as allowed under Rule 3 (5) / 3 (5A) of CCR 2004 on the 100% of Cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant is eligible for deduction from this rate which would be at the rate of 37.5% and not 35% as alleged by the department. 6. It is submitted that merely because the credit is allowed in two instalments, as under Rule 4 (2) of CCR 2004, the allowable deduction percentage cannot be calculated from the subsequent year of availing credit as such deduction (depreciation) is allowed for the usage period of the machine. In this case, the appellant started using the machine from November 2008 onwards. Hence, deduction percentage should be calculated from the period of using the machine which is November 2008 onwards only. This apart the credit relates to machine as a whole and therefore, the date of availing first 50% credit availed is to be reckoned for arriving at the deduction percentage for the entire capital goods. Therefore, the impugned differential duty demand cannot sustain. 7. Further, the entire machineries were transferred to their own unit and whatever duty paid on these machines was availed as Cenvat credit in Unit 1. The situation is revenue neutral and therefore, extended period cannot be invoked as held in the following decisions. a. CCE Versus Gujarat Glass Pvt Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the basis. The ordinary meaning of the words used in the Rules is very clear and does not give rise to any ambiguity. 11. The Ld. AR referred to the decision of the Larger Bench of the Tribunal in the case of CCE Versus Navodhaya Plastic Industries Ltd. 2013 (12) TMI 82 Cestat Chennai. Paragraph 7, 8 and 9 of the said judgment of the Larger Bench was referred to by the Ld. AR, which reads as under:- 7. During 1-9-2004 to 13-11-2007 the provision in force read as under : With effect from 10-9-2004, when new Cenvat Credit Rules, 2004 were introduced, the relevant rule, i.e. Rule 3(5), read as below : When inputs or capital goods, on which Cenvat credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, 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 9. 8. During the period when similar provision was in force C.B.E. C. had issued Circular No. 643/34/2002-CX., dated 1-7-2002 to the effect that credit amount to be reversed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issue clearly. 16. The appellant has availed Cenvat credit of 50% of the duty on capital goods on 22.11.2008. The balance 50% was availed only on 21.04.2009 (subsequent year). The appellant has calculated 2.5% deduction on the entire 100% from 22.11.2008 whereas, department is of the view that for the first year, the appellant cannot avail 2.5% deduction. Several capital goods have been removed during the disputed period and there is difference in the total amount that has to be paid due to the controversy of applying the deduction of 2.5%. 17. The provisions under Rule 3 (5)/3(5A) as noticed above would show that, the words used are from the date of availing credit. Though the capital goods are received in the factory and the appellant may have put to use, the legislature in Rule 3 (5A) has consciously used the words from the date of availing the credit . It has not used the words from the date on which the capital goods were put to use or from the date of receiving the capital goods in the factory. It can be seen that the date of availing the credit has been made the relevant date for applying the deduction of 2.5%. The appellant has sought to apply the deductions on 100% f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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