2017 (5) TMI 1246 - AT - Central Excise

Reversal of CENVAT credit - clearance to 100% EOU - case of appellant is that they had no intention to evade payment of duty and wherever there is a short payment it was on account of mere confusion in the law - Held that - the appellant has tried to justify the irregularities which has been pointed out by the Revenue but the said justifications have not been properly considered by the Revenue while confirming the demand - this case needs to be remanded back to the original authority with a direction to consider the reasons given by the appellant for the discrepancies observed by the Revenue during the course of audit - appeal allowed of remand.

Summary

Issues:
1. Appeal against rejection of appeal by Commissioner (A) based on irregularities found during departmental scrutiny.

Analysis:
The appellant, engaged in manufacturing excisable goods, faced allegations of various irregularities during a departmental audit. These included removal of CENVAT availed inputs to research institutions without credit reversal, non-receipt of re-warehousing certificate for EOU clearances, delay in payment of Central Excise Duty, removal of final products as trial tools without duty payment, and non-reversal of CENVAT credit on scrapped trial products. A show-cause notice was issued, leading to confirmation of demands by the adjudicating authority. The appellant contended that any discrepancies were unintentional and not to evade duty, citing confusion in the law. They also argued that the demand was time-barred due to no suppression. The consultant highlighted that duty was paid on manufactured goods and inputs, and certain credits were already reversed. For EOU clearances, the appellant claimed partial compliance and disputed interest charges due to payment delays caused by non-working days. Regarding trial tool removal, the appellant explained cases where tools were unapproved or not returned, leading to credit reversals after 180 days. The AR supported the original order findings.

Upon review, the Tribunal found the appellant's justifications for the irregularities insufficiently considered by the Revenue. Consequently, the case was remanded to the original authority for a fresh assessment, directing a thorough review of the appellant's explanations and documents. The Tribunal allowed the appeal by remand, emphasizing the need for a comprehensive reevaluation of the issues in accordance with the law.