2017 (5) TMI 1290 - AT - Central Excise

CENVAT credit - Held that - Commissioner should have considered the value forwarded by the appellant in the statutory records particularly when statutory records were not challenged by Revenue and further there is no law which prohibits the availment of Cenvat credit - matter remanded back to the Original Authority with direction that for the period from April, 2009 to November, 2009 value of clearances reflected in ER-1 returns should be taken into consideration for duty demandable and for the period for which duty is to be recovered from the appellant Cenvat credit on capital goods and inputs should be allowed - appeal allowed by way of remand.

Summary

Issues: Central Excise duty demand for unregistered manufacturing, computation errors in the Order-in-Original, entitlement to Cenvat credit on capital goods and inputs.

Central Excise Duty Demand for Unregistered Manufacturing:
The appellant, engaged in manufacturing Poly Propylene Glasses, was found unregistered during a Central Excise officers' visit. A show cause notice was issued for duty demand amounting to ?2,81,46,286 for glasses manufactured and cleared from 2006-07 to 2009-10. The appellant contested the notice, particularly challenging the methodology for duty computation and seeking allowance of Cenvat credit. The Original Authority confirmed a demand of ?13,07,335 for the period before December 2009 and imposed a penalty equal to the confirmed duty under Section 11AC of the Central Excise Act, 1944. The appellant appealed against this order.

Computation Errors in the Order-in-Original:
The grounds of appeal raised by the appellant included contentions that the computation of demand for 2009-10 was erroneous. They argued that the Commissioner assumed clearances of ?1,03,96,008 from May to November 2009, despite the appellant's registration in May 2009. The appellant claimed entitlement to Cenvat credit on capital goods and inputs for the years 2008-09 and 2009-10, which the Original Authority did not address. The Tribunal found these grounds valid, noting that the Commissioner should have considered the values from the appellant's statutory records, especially when they were not challenged by the Revenue. The matter was remanded back to the Original Authority with directions to consider the values from the appellant's returns for the specified period and allow Cenvat credit on capital goods and inputs.

Entitlement to Cenvat Credit on Capital Goods and Inputs:
The Tribunal emphasized that there is no law prohibiting the availment of Cenvat credit. It directed the Original Authority to allow Cenvat credit on capital goods and inputs for the period where duty is to be recovered from the appellant. The Adjudicating Authority was instructed to pass a reasoned order within three months, considering the given directions and reevaluating the penalty based on the duty demandable net of Cenvat credit.