2015 (11) TMI 504 - AT - Central Excise

Reversal of CENVAT Credit - cenvat credit on raw material, work in progress, and raw material contained in finished goods after crossing the exemption (SSI Exemption) limit which Revenue sought to deny to the appellant - Held that - Appellant has filed a declaration showing quantity of raw material as 125.026 and 53.253 MT respectively. He also filed a declaration of inputs contained in the finished goods as 1,361 MT and 1,848 MT respectively. The scrap lying in the factory is 1.120 MT and 6.015 MT respectively. The total raw material shown by the appellant on which the cenvat credit is taken is 127.507 MT and 61.116 MT respectively. - On perusal of the verification report filed by the Range Superintendent and same has been got verified from the record of the appellant. On verification, there was difference of 294 Kg in inputs contained in work-in-progress on which the adjudicating authority has denied the Cenvat credit to the appellant, which might be due to the calculation error. The finding of the learned Commissioner (Appeals) is that report of the Range Superintendent is afterthought and is not acceptable as appellant has filed declaration at the time of availing cenvat credit on inputs contained in finished goods, work-in-progress and with the job worker. Therefore, I hold that appellant is entitled to take cenvat credit on inputs contained in the process of finished goods and lying with the job worker as per Rule 3 (2) of CCR, 2004. In these circumstances, I hold that appellant has correctly taken the cenvat credit. Consequently, the appellant is not required to reverse the cenvat credit - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of cenvat credit on raw material, work in progress, and raw material in finished goods after crossing the exemption limit.
2. Rejection of the refund claim related to denied cenvat credit.

Analysis:
1. The appellant, a tin box manufacturer availing SSI exemption, faced disallowance of cenvat credit when the exemption limit was crossed. The appellant filed declarations and reversed cenvat credit during proceedings. The adjudicating authority found the appellant had taken credit correctly, except for a meager amount. The Revenue appealed to the Commissioner (Appeals) who set aside the orders, leading to the current appeal. The Range Superintendent's verification report supported the appellant's credit claim, and discrepancies were attributed to calculation errors. The Tribunal held that the appellant was entitled to the cenvat credit on inputs in finished goods and with the job worker, as per Rule 3(2) of CCR, 2004. The appellant was not required to reverse the cenvat credit as demanded by the Commissioner (Appeals).

2. The second appeal was a consequential relief of the first appeal. The Tribunal granted relief in the second appeal as a result of allowing the first appeal. By setting aside the impugned orders, both appeals were allowed with consequential relief. The judgment was dictated and pronounced in the open court by the Member (Judicial) of the Appellate Tribunal CESTAT NEW DELHI, Shri Ashok Jindal.