2007 (8) TMI 195 - AT - Central Excise

Credit on inputs On receipt of inputs entry was made properly in RG-23A Pt. II immediately Credit taken on basis of duty paying documents Inputs used in finished goods is verified by adjudicating authority No reason to deny credit on ground of delay

Summary

Issues:
- Disallowance of Cenvat credit
- Compliance with Rule 4(1) of Cenvat Credit Rules

Analysis:
1. The case involved a show cause notice proposing to disallow Cenvat credit of Rs. 46,547 based on the allegation that the appellant availed credit against an invoice dated 17-8-02 but entered it in their register on 18-8-2002. The adjudicating authority initially allowed the credit, but the revenue appealed. The Commissioner (Appeals) held that the credit was not taken in accordance with Rule 4(1) of Cenvat Credit Rules.

2. Upon hearing both sides and reviewing the records, it was confirmed that the appellant received and accounted for the goods against the invoice on 18-8-02, while the credit was taken on 13-6-03. The Ranger Superintendent's letter verified the dispatch and return of inputs for job work within the stipulated period, although there was a discrepancy in the date entry.

3. The appellant's immediate recording of goods receipt in the RG-23A Pt. II register upon input receipt was in compliance with Rule 4(1) of Cenvat Credit Rules, which allows for immediate credit upon input receipt in the factory. Both lower authorities acknowledged proper accounting of inputs in the RG 23A Pt. I register and verified the use of inputs in finished goods, concluding that there was no basis to deny credit due to a delay in entering details in the RG 23A Pt. II register.

4. Consequently, the Commissioner (Appeals)'s order disallowing the credit was set aside, and the adjudication order was reinstated. The appeal was allowed with consequential relief, affirming the appellant's compliance with Cenvat credit rules and proper accounting practices.

(Dictated and pronounced in open court)