EICHER TRACTORS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) IN view of the conflicting decision on the issue in respect of the correct valuation of the capital goods and the Inputs on which Cenvat credit has been availed when removed as such, the issue has been referred to the Larger Bench.

(2.) THE appellants availed the Cenvat credit on the inputs purchased by them for use in their final products. They removed the inputs by reversing the credit availed on such inputs when removed from their factory.

(3.) THE contention of the appellants is that they are engaged in the manufacture of IC engines and they purchase the duty paid inputs for use in their final products and avail credit of the duty paid on such inputs as provided under the Cenvat Credit Rules, and at times remove such duty paid inputs from the factory to their marketing division by reversing the credit taken on such inputs. The Revenue objected the reversal of the credit on such inputs on the ground that as per Rule 3(4) of the Cenvat Credit Rules, on the removal of the inputs the manufacturer shall pay an amount equal to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of removal and on the value determined for such goods under Section 4 of the Central Excise Act. There is no dispute about the rate of the duty applied but the dispute is limited to the value of the inputs removed by the appellants. The Revenue seeks to levy the duty on the transaction value at the time of removal. The learned Counsel appearing for the appellants submits that the very same issue was in dispute when the new Cenvat Credit Rules were introduced and the Board gave a clarification vide its Circular No. 6/39/2000 -CX. -I, dated 1 -7 -2002 which at Point No. 14 reads as under :