2004 (10) TMI 549 - AT - Central Excise

Summary

Issues:
Challenge to denial of credit on the ground of delay in receipt of goods after expiry of 180 days.

Analysis:
In this case, the appellants contested the denial of credit amounting to Rs. 2,35,008 based on the inputs sent to a job worker and received back after 180 days. The Commissioner (Appeals) upheld the denial citing Rule 57F(11) which specifies actions if inputs are not returned within the specified period. However, the delay in this case was only 5 to 27 days beyond the 180-day limit. The appellants relied on precedents such as CCE, Mumbai v. Godrej Boyce Mfg. Co. Ltd. and CCE, Pondicherry v. Tambraparani Containers (P) Ltd. to support their claim. These cases emphasized that if inputs are fully returned, the credit can be reclaimed, and Rule 57F(11) applies only when inputs are not received back within 180 days.

The appellants argued that as the goods were eventually returned and used in manufacturing final products, they should be entitled to the credit. The Tribunal agreed with this contention, citing the precedents where it was established that the reversal of 10% credit while sending inputs to a job worker does not affect the reclaiming of credit upon their return. The Tribunal found that the denial of credit to the appellants was unjustified based on the principles outlined in the referenced judgments. Consequently, the appeal was allowed, and the appellants were granted the credit amount.

Therefore, the Tribunal's decision in this case highlights the importance of adherence to the specific provisions under Rule 57F regarding the return of inputs from job workers within the prescribed timeframe. It also underscores the significance of established precedents in determining the eligibility for reclaiming credit in situations where goods are delayed but eventually returned and utilized in the manufacturing process.