2007 (12) TMI 172 - AT - Central Excise

Show-cause notice was issued denying credit in respect of quantity of inputs on the ground that the inputs were not received - statutory record maintained in respect of the duty paid inputs such as RG-23 Part-I and II, the quantity of inputs were shown to be received in the factory - In absence of any evidence that the same quantity was received by the appellant from some other sources it cannot be held that the appellant had not received such quantities credit allowable

Summary

Issues:
- Denial of credit of duty for inputs not shown to be received in the factory of manufacture.

Analysis:
The appellant filed an appeal against the denial of duty credit for inputs, specifically liquid argon gas, received from their trading unit. The lower authority denied the credit based on the appellant's alleged failure to demonstrate the receipt of inputs in the factory of production. The appellant contended that they maintained statutory records, such as RG-23 Part-I and II, showing the receipt of inputs in the factory and their subsequent use in the manufacturing process. They also presented material receipt memos as evidence of input receipt, which the lower authority dismissed as an afterthought. The appellant argued that since the inputs were entered in statutory records and used in manufacturing goods cleared with duty payment, credit should not be denied.

The Revenue asserted that the onus was on the appellant to prove input receipt in the factory, pointing out the absence of corresponding entries in the gate register. They contended that the appellant failed to provide substantial evidence supporting input receipt, justifying the demand for duty payment.

The Tribunal found that the appellant indeed received the inputs from their trading unit, which were cleared after duty payment. The statutory records RG-23 Part-I and II indicated the receipt of quantities in question in the factory, subsequently used in manufacturing goods cleared with duty payment. As there was no evidence suggesting receipt from alternative sources, the Tribunal concluded that the appellant had received the inputs, as they were utilized in the manufacturing process. Consequently, the impugned order denying credit was set aside, and the appeal was allowed, with the appellants entitled to any consequential relief as per the law.