2016 (2) TMI 965 - AT - Central Excise

Denail of CENVAT credit - non-maintenance of records of sales returns - Rule 16 of the Central Excise Rules, 2002 - as per Rule 16 of the Central Excise Rules, 2002 the assessee is required to maintain record as well as sale returns and on the basis of that assessee is entitled to take Cenvat credit - Held that - the document on the strength of which the appellant has taken Cenvat credit of sale returns the said document is sufficient for maintaining the record. Further, I find that the appellant produced relevant record of maintenance of sale returns before the adjudicating authority which has not been considered. In that circumstances, Cenvat credit cannot be denied. Therefore, I hold that appellant has availed Cenvat credit later on sale return/documents at the time of return of goods. In these circumstances, impugned order deserves no merits hence set aside. Appeal is allowed with consequential relief, if any.

Summary

Issues:
Cenvat credit denial based on lack of maintaining sale return records.

Analysis:
The case involved the denial of Cenvat credit amounting to Rs. 50,375 to the appellant for the period of January 2012 to February 2013 due to the alleged failure to maintain records of sale returns. The appellant, engaged in manufacturing motor vehicle parts, had availed Cenvat credit on sale returns as per Rule 16 of the Central Excise Rules, 2002. An audit revealed the absence of maintained records of sale returns, leading to a show cause notice being issued. Despite producing relevant records during adjudication, the credit denial was upheld, resulting in duty demand, interest, and penalties. The appeal to the Commissioner (Appeals) also failed to reverse the decision.

The appellant contended that all records were presented during adjudication, disputing the denial of credit. The appellant had availed Cenvat credit on sale returns under Rule 16, which was not contested. The appellant argued that the records produced were sufficient to support the credit claim, emphasizing compliance with the rule's requirements. The Revenue, represented by the ld. AR, maintained the position taken in the impugned order.

Upon hearing both parties, the Member (J) analyzed the situation. As per Rule 16 of the Central Excise Rules, 2002, the assessee must maintain records of sale returns to claim Cenvat credit. In this case, the appellant had indeed availed credit on sale returns, which was undisputed. The Revenue's contention of non-maintenance of records was countered by the fact that the documents supporting the credit claim were adequate for record-keeping purposes. It was noted that the appellant had submitted relevant records during adjudication, which were disregarded. Consequently, the Member (J) concluded that the denial of Cenvat credit was unjustified. The impugned order was set aside, allowing the appeal with any consequential relief.

In conclusion, the judgment highlighted the importance of maintaining proper records to support Cenvat credit claims under Rule 16 of the Central Excise Rules, 2002. The appellant's compliance with the rule and the sufficiency of the documents presented were crucial factors in overturning the credit denial decision.