2008 (6) TMI 515 - AT - Central Excise

Cenvat/Modvat Credit - crates - Held that - there was no need to maintain separate account of inputs which find repeated use in the manufacture of final products, once their consumption is accounted initially. Rule 6 of Cenvat Credit Rules, 2004 contemplates maintenance of accounts only for virgin inputs yet to enter the manufacturing stream - SCN is time barred.

Summary

Issues:
1. Appeal against Order-in-Original No. CEX-14/2006 dated 14-12-2006.
2. Maintenance of separate books of accounts for plastic crates.
3. Reversal of Cenvat Credit on plastic crates.
4. Imposition of penalty and interest.
5. Time-barred Show Cause Notice.
6. Interpretation of Rule 6 of Cenvat Credit Rules, 2004.
7. Applicability of case laws in support of contentions.
8. Revenue's appeal against the impugned order.

Analysis:
1. The party's appeal focused on the issue of maintaining separate books of accounts for plastic crates used in the manufacture of exempted and dutiable final products. The Commissioner ordered the reversal of Cenvat Credit on 3,00,418 plastic crates and imposed penalties and interest. The party contended that the impugned order exceeded the scope of the Show Cause Notice, argued against the quantity of crates assessed, and raised concerns about the time-barred notice. They emphasized maintaining separate records for inputs and the applicability of Rule 6 of Cenvat Credit Rules, 2004.

2. The Tribunal carefully assessed the facts and found that the party had evidence of reversing wrongly availed Cenvat credit on 7000 crates. The demand for credit on 3,00,418 crates was deemed baseless as the party had not availed any credit initially. The Tribunal agreed with the party's argument that maintaining separate accounts for reusable inputs is not mandatory under Rule 6 of Cenvat Credit Rules, 2004. Additionally, they supported the contention that the Show Cause Notice was time-barred, leading to the decision to set aside the impugned order and allow the party's appeal.

3. The Revenue's appeal challenged the Commissioner's order, arguing that the demand should have been confirmed as per the Show Cause Notice instead of ordering a reversal of credit on plastic crates. The Tribunal noted that since the party's appeal had already been allowed, the Revenue's appeal had no basis to continue. Therefore, the Revenue's appeal was dismissed as infructuous.

This comprehensive analysis highlights the key legal arguments, interpretations of relevant rules, and the final decisions made by the Appellate Tribunal CESTAT, Bangalore in response to the appeals presented before them.