2005 (11) TMI 283 - AT - Central Excise

Summary

Issues:
1. Availing CENVAT credit on missing C.I. Moulds
2. Contravention of Rule 4(2)(b) of CENVAT Credit Rules, 2001
3. Appeal against the Order-in-Original

Analysis:

Issue 1: Availing CENVAT credit on missing C.I. Moulds
The case involves the respondent company availing CENVAT credit on C.I. Moulds used in manufacturing final products, where a shortage of 393 pieces of C.I. Moulds was detected during an inspection. The company argued that the missing Moulds had been converted into scraps and used in the production cycle of M.S. Ingots. The Commissioner (Appeals) accepted this explanation, noting that the scrapped Moulds were accounted for in the statutory Form-IV Register. The Tribunal found the explanation plausible and remanded the matter to the lower authority for specific findings, emphasizing the need for verification before dismissing the company's claim.

Issue 2: Contravention of Rule 4(2)(b) of CENVAT Credit Rules, 2001
The Revenue contended that the respondent company contravened Rule 4(2)(b) of the CENVAT Credit Rules, 2001, by availing credit on missing C.I. Moulds. However, the company argued that they had appropriately used the capital goods in manufacturing final products and paid duty on the waste and scrap derived from the Moulds. The Tribunal acknowledged the company's compliance with accounting procedures and the use of scraps as inputs, leading to the remand of the case for further adjudication based on principles of natural justice.

Issue 3: Appeal against the Order-in-Original
The appeal was filed by the Revenue against the Order passed by the Commissioner of Central Excise (Appeal-IV), Kolkata. The Commissioner (Appeals) set aside the Order of the lower authority, prompting the Revenue to appeal further. The Tribunal, after considering the arguments from both sides, remanded the matter to the lower authority for detailed findings on the respondent company's explanation regarding the missing C.I. Moulds, emphasizing the importance of verifying the claims before making a final decision.

In conclusion, the Tribunal allowed the appeal by way of remand, highlighting the significance of verifying the company's claims regarding the missing C.I. Moulds before reaching a final decision.