2018 (5) TMI 1353 - AT - Central Excise

CENVAT credit - denied on the ground that the appellant has not received the input goods - Held that - the charge that goods have been diverted by the appellant to M/s I.J. International is not sustainable as M/s I.J. International is job worker of the appellant, therefore, Cenvat credit cannot be denied to the appellant - the appellant has correctly taken the Cenvat credit on the inputs in question - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of Cenvat Credit for alleged non-receipt of input goods

Analysis:
The appellant, engaged in manufacturing Fence Fittings, was denied Cenvat Credit based on the allegation that they had not received the input goods, which were diverted to a job worker named M/s I.J. International. The appellant had informed the Department in writing that M/s I.J. International was their job worker and they would be sending goods for processing under Notification No. 214/86. An investigation alleged non-receipt of inputs, leading to a show cause notice denying Cenvat credit. The matter was adjudicated, resulting in the denial of credit, imposition of duty, interest, and penalty.

The appellant contended that they had duly informed the Department about the arrangement with M/s I.J. International, which was not disputed by the authorities. The appellant argued that since it was admitted that M/s I.J. International was their job worker, the charge of diverting goods was unsustainable, and therefore, the denial of Cenvat credit should be set aside.

The argument put forth by the appellant was considered, and upon verification of records, it was found that the authorities had not disputed the receipt of the letter dated 04.10.2011, confirming the arrangement with M/s I.J. International as their job worker. As this fact was established, it was held that the charge of diverting goods was not valid, and the appellant had rightfully taken the Cenvat credit on the inputs in question. Consequently, the impugned order was found to lack merit, set aside, and the appeal was allowed with any consequential relief.

In conclusion, the judgment revolved around the denial of Cenvat Credit to the appellant due to alleged non-receipt of input goods, which was refuted based on the documented communication with the job worker, leading to the setting aside of the impugned order and allowing the appeal.