2013 (7) TMI 750 - AT - Central Excise

Cenvat Credit on Input - Direct dispatch of material to Job Worker s premises - M/s Aristo Exports, Daman (the unit) is engaged in the manufacture and hold Central Excise registration for the same - During the course of CERA audit observed that the inputs viz. PP REPOL supplied by M/s Reliance industries Ltd, Jamnagar/ were directly sent to M/s Aristo Plast Enterprise Pvt. Ltd., Palghar, Maharashtra, for job work Held that - As per sub rule 5(a) of Rule 4 of Cenvat Credit Rules, 2004, an assessee is eligible to avail the cenvat credit of the inputs if goods are manufactured out of the inputs delivered to the job worker - There is no dispute as to purchases of the inputs and receipt of the processed goods from the job worker s premises in the hands of appellant - Rule 4(5)(a) that the appellant is eligible to avail cenvat credit on the receipts of processed goods from the job worker s premises Decided in favor of Assessee.

Summary

Issues Involved:
Denial of Cenvat credit on inputs delivered directly to job worker; Dispute over availment of credit by the appellant; Interpretation of Rule 4(5)(a) of Cenvat Credit Rules, 2004.

Analysis:

1. The case involves a dispute regarding the denial of Cenvat credit on inputs purchased by the appellant and delivered directly to a job worker. The Revenue argued that the appellant should not have availed the credit of inputs received on subsequent days while claiming credit on an earlier date.

2. Both parties presented their arguments. The appellant's counsel emphasized that the inputs were delivered to the job worker and subsequently received back after processing for the manufacturing of final products. He claimed that a clerical error led to the discrepancy in dates but maintained that the credit should not be denied.

3. The Revenue contended that the appellant had availed credit before receiving the processed goods from the job worker in one instance, and there were improper entries in the records regarding the receipt and issuance dates of inputs.

4. The Tribunal reviewed the submissions and records. It noted that there was no dispute about the delivery of goods to the job worker and the preparation of job work challans. The appellant accounted for all inputs delivered to the job worker, correlating them with the processed goods received back.

5. The Tribunal referred to Rule 4(5)(a) of the Cenvat Credit Rules, 2004, which allows Cenvat credit if goods sent to a job worker are received back within 180 days. Since the appellant received the processed goods back and used them in manufacturing, the Tribunal found the appellant eligible for Cenvat credit as per the rule.

6. Consequently, the Tribunal held that the impugned order was unsustainable and set it aside, allowing the appeal in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing compliance with Rule 4(5)(a) of the Cenvat Credit Rules, 2004, and the proper correlation of inputs delivered to the job worker with the goods received back after processing.