2017 (12) TMI 137 - AT - Central Excise

Rebate claim - CENVAT credit - whether the appellants have manufactured the goods in question in their factory or not? - Held that - chartered engineer has issued a certificate that the appellant has not purchased any machinery during the period from 2007-2008 except Air-conditioner/Refrigerator which supports the fact that the appellants are having manufacturing facility in their factory - The appellants are having inadequate infrastructure to manufacture of building hardware, Garden and Agricultural Hand Tools and they are having D.C. power backup capacity - Further, the appellants filing regular ER-3 returns and same has not been disputed - All these evidences show that appellants are having manufacturing facility of the impugned goods and the same was not disputed during the period in question. The burden of proof cast on the Revenue that if the appellants are not having manufacturing facility then from where the goods were procured and exported by the appellants. The said crucial evidences is missing in the case. The benefit of doubt goes in the favour of the appellants as they have shown the ample number of machinery installed in the factory which have been used for the manufacturing of finished goods. As crucial evidences of diversion of inputs and procurement of finished goods is missing in the investigation, therefore, the Cenvat Credit cannot be denied to the appellants and consequently, rebate claim already sanctioned to the appellants is not recoverable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of Cenvat Credit and rebate of excise duty on exported goods
- Manufacturing capability of the appellants
- Relevance of expert opinions
- Admissibility of rebate on exported goods
- Compliance with Central Excise Rules

Analysis:
1. The appellants contested the denial of Cenvat Credit and rebate of excise duty on exported goods, arguing that it amounted to a double demand of duty. They highlighted discrepancies in the amounts claimed and sanctioned, asserting compliance with regulations.
2. The appellants presented evidence supporting their manufacturing capability, including machinery lists, certifications, and audit reports. They refuted claims of inadequate facilities and emphasized adherence to Central Excise Rules and ISO certifications.
3. The Revenue contended that the appellants lacked the capacity to manufacture the goods in question, citing discrepancies in raw material usage and production processes. They argued that the goods exported were not produced by the appellants, rendering them ineligible for rebate.
4. The Tribunal examined the evidence, including machinery lists, certifications, and audit reports, to determine the appellants' manufacturing capacity. They noted the absence of crucial evidence proving diversion of inputs or procurement of finished goods by the appellants.
5. Ultimately, the Tribunal found in favor of the appellants, citing the lack of conclusive evidence to support the Revenue's claims. They set aside the impugned order, allowing the appeals and any consequential relief.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision based on the evidence presented by both parties.