SALONA COTSPIN LTD. Vs. CCE

JUDGEMENT

(1.) THE present appeal filed by M/s Salona Cotspin Ltd. Sathyamangalam is against the order of the Commissioner (Appeals), Salem upholding the demand of Rs. 48,075/ - being differential duty payable on capital goods removed by the appellants, imposition of penalty of Rs. 48,075/ - and interest due under Section 11AB of the Central Excise Act, 1944. The facts of the case are that the appellants had removed different items of used textile machinery on 11.2.2002 and 2.5.2003. On the item cleared on 11.2.2002, the appellants paid duty on its value after applying depreciation on the purchase price of the item @ 2.5% per quarter of its use. On the other two items of machinery cleared on 2.5.2003, the appellants paid duty on the invoice value.

(2.) AT the time of clearance of the first item, the relevant Rule 3(4) of Cenvat Credit Rules, 2000 read as follows:

(3.) AS the provisions that existed during the material periods required the assessee to pay duty on the capital goods as if they were manufactured by the appellants in the first case and they required the appellants to reverse the credit originally availed in respect of the items removed on 2.5.2003, proceedings were initiated to recover the differential duty from the appellants which culminated in Order -in -Original and the impugned order.