2017 (11) TMI 1457 - AT - Central Excise

CENVAT credit - service of renting of immovable property received in respect of the premises of their job worker - denial on the ground that during said period M/s. Rupal Drugs Ltd. were manufacturing for themselves and therefore cenvat credit cannot be allowed - Held that - appellants have claimed that during 2007-08 and 2008-09 M/s. Rupal Drugs Ltd. was doing their job work and not involved in manufacturing activity of their own. In support of same, he has produced the ER-1 return of the said period which he claimed to have produced before the lower authorities who did not notice on the same, but instead relied on the letter dated 17.02.2010 which was not related to M/s. Rupal Drugs Ltd. - there is contradiction in the impugned order - matter is remanded to the Commissioner (Appeals) to resolve the difference between the letter dated 17.02.2010 relied by him and the ER-1 submitted by the appellants - appeal allowed by way of remand.

Summary

Issues involved:
Denial of cenvat credit on renting of immovable property for job worker's premises.

Detailed Analysis:

1. Denial of cenvat credit for specific periods:
The appellant, M/s. Suyash Laboratories Ltd., appealed against the denial of cenvat credit on the service of renting immovable property for their job worker's premises. The dispute primarily revolved around the eligibility of claiming cenvat credit for the years 2007-08, 2008-09, and 2009-10. The appellant argued that during 2009-10, the job worker was only operating as a job worker for them, not engaged in separate manufacturing activities. However, for 2007-08 and 2008-09, the credit was denied on the basis that the job worker was manufacturing for themselves during those periods, rendering the cenvat credit inadmissible.

2. Evaluation of evidence and submissions:
The appellant's counsel contended that the job worker, M/s. Rupal Drugs Ltd., was not involved in manufacturing activities during 2007-08 and 2008-09. This assertion was supported by the production of ER-1 returns for the said periods, indicating nil manufacturing activity. Despite presenting this evidence to the authorities, the Commissioner relied on a letter dated 17.02.2010, which was not pertinent to M/s. Rupal Drugs Ltd., leading to an erroneous conclusion regarding the manufacturing status of the job worker during the disputed periods.

3. Contradiction in the impugned order:
Upon careful examination of the submissions and evidence presented, the appellate tribunal noted a contradiction in the impugned order. It was observed that the basis for denying cenvat credit for 2007-08 and 2008-09, i.e., the alleged manufacturing activities of the job worker for themselves during those years, was not substantiated by the RT-12 return. Consequently, the tribunal set aside the order and remanded the matter to the Commissioner (Appeals) to reconcile the discrepancies between the letter relied upon and the ER-1 returns submitted by the appellant, ultimately allowing the appeal by way of remand.

In conclusion, the judgment highlighted the importance of accurate assessment of evidence and proper consideration of relevant documents in determining the eligibility of cenvat credit, emphasizing the need for consistency and coherence in decision-making processes within the realm of indirect taxation laws.