COMMISSIONER OF CENTRAL EXCISE Vs. VISHWA PAPER MILLS

JUDGEMENT

(1.) This appeal has been filed by the Revenue. The facts of the case are that the respondents are engaged in manufacturing of Kraft Paper and availed CENVAT credit on capital goods viz. "Forklift" for Rs. 1,04,800/ - during the financial year 2001 -02 & 2002 -03 and cleared the said goods on payment of duty of Rs. 30,400/ - on 02.02.2004. As per Rule 3 of Central Excise Rules, 2002, the respondents were required to pay equal amount of credit availed in respect of capital goods for as such clearances. Hence, it appeared that the balance of CENVAT credit availed i.e. Rs. 74,400/ - were required to be recovered from the respondents. A show -cause notice was issued and after adjudication proceedings the demand was dropped. On an appeal by the Revenue, the Order -in -Original was confirmed by the Commissioner (Appeals). Aggrieved from the same, Revenue is before me.

(2.) Shri P.K. Agarwal, learned SDR appeared before me and submitted that though the method of valuation given under Board's Circular dated 1.7.2002 is no more applicable due to amendment in Rule 3(4) of Cenvat Credit Rules, 2002. However, it is clear from the said Circular that Rule 3(4) of Cenvat Credit Rules, 2002 covers clearance of used capital goods also. He, further, submitted that the word "as such" also covers used capital goods. As per Rule 4(5)(a) of Cenvat Credit Rules, 2002, the inputs/capital goods "as such" could be cleared for repairing/ reconditioning. Repairing/recondition is done on used goods. The word "as such" was also appearing in Rule 4(5)(a) of Cenvat Credit Rules, 2002. Thus, in terms of Rule 3(4), not only the unused capital goods but also the used capital goods could be cleared and as per this provision amount equal to credit taken was required to be paid. He submitted that Rule 3(4) covers clearance of unused as also the used capital goods.

(3.) On the other hand, Cost Accountant, an authorized representative of the respondents reiterated the impugned order.