2015 (7) TMI 999 - HC - Central Excise

Simultaneous availment of S.S.I. exemption for home consumption and modvat credit for export - Non maintenance of separate account - Held that - respondents appear to have rejected the claim on the ground that the separate account books not having been maintained, it was difficult to ascertain as to whether the inputs in respect of which CENVAT Credit was claimed have actually been used for the purpose of the production of the goods which were exported. In other words, the mere fact that separate account books had not been maintained for the period April, 1998 to 27.10.1998 is not the ground for rejecting the claim. - appellant s invoices indicated the product to be alloys bars whereas the stock register refers to the goods as steel. It would be necessary initially at least for the appellant to establish that the goods were the same. - The impugned order and judgment is, therefore, set aside only to enable the appellant to establish its claim. The matter is remanded to the Adjudicating Authority to pass a fresh order - Decided in favour of assessee.

Summary

Issues involved:
1. Rejection of claim based on failure to maintain separate accounts for inputs.
2. Requirement to establish actual use of inputs for exported goods.
3. Discrepancy between product indicated in invoices and stock register.

Analysis:
1. The judgment addresses the issue of the rejection of the appellant's claim due to the failure to maintain separate accounts and inventory for inputs used in both export production and home consumption. The court notes that the rejection was not solely based on the lack of separate accounts but on the difficulty in ascertaining whether the claimed CENVAT Credit inputs were actually utilized for exported goods. The court clarifies that the absence of separate account books is not the sole ground for the rejection of the claim, emphasizing the need for the appellant to establish the actual use of inputs independently.

2. The judgment further discusses the requirement for the appellant to demonstrate the consistency of the goods produced, as indicated in the invoices and stock register. The discrepancy between the product described in the invoices as alloy bars and referred to in the stock register as steel raises concerns about the uniformity of the goods. The court highlights the importance of establishing the consistency of the goods to support the appellant's claim effectively.

3. In conclusion, the court sets aside the impugned order and judgment to provide the appellant with an opportunity to substantiate its claim on merits. The matter is remanded to the Adjudicating Authority for a fresh order, emphasizing that the appellant's failure to maintain separate books during a specific period should not be the sole reason for rejecting the claim. The judgment ensures fairness by allowing the appellant to establish the validity of the claim independently, focusing on the actual utilization of inputs for export production.