At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: RAMESH NAIR
For Petitioner: Rajesh Ostwal, Advocate And For Respondents: N.N. Prabhudesai, Supdt. (A.R.)
1. The appellant are engaged in the manufacture of excisable goods falling under Chapters 52, 54 & 55 of Central Excise Tariff Act, 1985. They are availing modvat credit of duty on capital goods since 1994. During the period 1st April, 2004 to 8th July 2004, they cleared scrap of machinery and machinery parts without payment of duty. The case of the department is that the removal of scrap capital goods is liable for payment of duty in terms of Rule 3(4) of the Cenvat Credit Rules, 2002.
2. Shri Rajesh Ostwal, Ld. Counsel appearing on behalf of the appellant submits that the very same issue, in the case of appellant, had come up before this Tribunal and this Tribunal vide order No. A/94274/16/SMB dt. 4.11.2016 held that in case of clearance of used parts/capital goods, Rule 3(4) is not applicable.
3. Shri N.N. Prabhudesai, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He placed reliance on the following judgements:
"(i) Collector of Customs, Madras and Others v. D. Bhoormull : 1983 (13) E.L.T. 1546 (S.C.)
(ii) Phoenix Mills Ltd. v. Union of India : 2004 (168) E.L.T. 310 (Bom.)
(iii) GNFC Ltd. v. Union of India 2007 (214) E.L.T. 18 (Guj.)"
4. I have carefully considered the submissions made by both sides and perused the records. I find that the same issue, in the appellant's own case, has been decided by this Tribunal vide order dt. 4.11.2016. The relevant finding of the said order is reproduced below:
"4. I have carefully considered the submissions made by both the sides, I find that the demand was raised by invoking Rule 3(4) of Cenvat Credit Rules, 2002 which reads as follows:
RULE 3(4) CENVAT Credit-
When inputs or capital goods, on which CENVAT credit has been 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. From the plain reading of the above Rule, it is clear that the duty is required to be paid only if the capital goods is removed as such. In the present case, it is undisputed that the worn out parts of the capital goods were cleared, therefore in case of used parts/capital goods Rule 3(4) is not applicable. The judgment cited by the Ld. Counsel support their case. The impugned order is set aside. The appeal is allowed."
In view of the above decision, the issue is
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no longer res integra. As regard the judgment relied upon by the Ld. AR, those judgments are neither relevant in the present case nor the facts of those case similar to the facts of this case. As per my above discussion the impugned order is set aside. The appeal is allowed.