2016 (12) TMI 1618 - AT - Central Excise

CENVAT credit - duty paid returned goods - it has been alleged in the SCN that the appellant failed to submit any documentary evidence of receipt and use of the returned goods in their factory and clearance of the resultant goods there from - Held that - there is no requirement of maintenance of separate records for availing credit of the duty paid on the returned goods - Both the authorities below had not examined the documents placed by the appellant - remanded to the Adjudicating Authority to decide afresh after considering the documents and case laws - appeal allowed by way of remand.

Summary

Issues: Disallowance of Cenvat Credit on duty paid returned goods

Detailed Analysis:

1. The appellant, engaged in manufacturing Cold Rolled Steel Strips, availed Cenvat Credit of &8377; 70,339.00 based on invoices for duty paid returned goods under Rule 16 of the Central Excise Rules, 2002. The Adjudicating Authority disallowed the credit, imposed interest, and a penalty equal to the credit amount. The Commissioner (Appeals) upheld the decision.

2. The Show Cause Notice alleged the appellant failed to provide documentary evidence of receipt, use, and clearance of the returned goods. The Commissioner (Appeals) noted the lack of proof that the returned goods were duty paid. The appellant, however, presented documents showing availed Cenvat Credit with invoices of duty paid returned goods.

3. Referring to a previous Tribunal case, it was observed that Rule 16 of Central Excise Rules, 2002 does not mandate separate records for availing credit on duty paid returned goods. The rule requires providing details of receipts in records and allows taking Cenvat credit as if the goods were received as inputs under Cenvat Credit Rules, 2002.

4. The appellant argued that the authorities did not examine the documents submitted. The Tribunal, considering the settled legal position, concluded that no separate records are necessary for claiming credit on duty paid returned goods. The impugned order was set aside, and the matter was remanded for a fresh decision, allowing both parties to present evidence.

5. The Tribunal emphasized granting a reasonable opportunity for the appellant to be heard, keeping all issues open. Ultimately, the appeal was allowed by way of remand, providing a chance for the Adjudicating Authority to reconsider after reviewing the documents and case laws presented by the appellant.