2017 (5) TMI 507 - AT - Central Excise

Reversal of MODVAT credit - opting out of MODVAT credit scheme - it was found the figures of reversal of credit were not matching with the figures of balance sheet - the sole ground for filing the appeal by the Revenue is that the Commissioner (Appeals) has not examined the books of accounts - Held that - the books of accounts were examined by the Commissioner (Appeals) where the stock position of 31.3.1997 and 31.3.1998 was with the department itself which shows that on the inputs in question, the respondent has not taken the credit - When the certificate is on record, the Commissioner (Appeals) has rightly set aside the demand against the respondent, therefore, there is no infirmity with the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against dropped demand confirmed by Commissioner (Appeals) based on stock position and certificate examination.

Analysis:
The judgment revolves around an appeal by the Revenue against an order where the Commissioner (Appeals) dropped a demand confirmed through adjudication after examining a certificate and stock position. The respondent had opted out from the modvat scheme on specific dates and reversed the credit related to inputs and finished goods accordingly. Discrepancies arose between the figures of credit reversal and the balance sheet, leading to initiation of proceedings against the respondent. The adjudicating authority upheld the demand, prompting the appeal. The Commissioner (Appeals), however, found that the respondent correctly reversed the credit based on the stock position filed, which matched the department's records for the relevant dates. The Revenue contended that the Commissioner (Appeals) did not scrutinize the books of accounts and relied solely on a certificate, seeking to set aside the order.

The arguments presented by both parties centered on the examination of stock positions and credit details. The Revenue insisted that the Commissioner (Appeals) failed to review the books of accounts adequately, emphasizing the need for a more thorough examination. Conversely, the respondent's counsel highlighted the detailed stock position submitted, demonstrating the non-availment of credit on specific inputs as verified by the department. The respondent's compliance with the reversal requirements was evident from the records, leading to the assertion that the demand was unsustainable.

Upon careful consideration of the submissions, the judgment emphasized that the Commissioner (Appeals) did examine the books of accounts, particularly the stock positions for the relevant periods. The verification revealed that the respondent had not availed credit on certain inputs, aligning with the certificate on record. Consequently, the impugned order dropping the demand was deemed appropriate and upheld, resulting in the dismissal of the Revenue's appeal. The judgment concluded by pronouncing the decision in the open court, settling the matter in favor of the respondent.