2023 (9) TMI 409 - AT - Central Excise

CENVAT Credit - inputs - raw materials like MS plates, MS bars for manufacture of finished goods known as MS Fish Plates and Metal Liner which are supplied to Indian Railways - chartered accountants certificate not considered - period 2005 to May 2006 - Extended period of limitation - HELD THAT - The appellant has provided proper evidence in the form of Chartered Engineer s Certificate wherein by way of a flow chart, the Chartered Engineer has specified as to where and how the goods in question have been used within the factory premises of the appellants. The Adjudicating authority has not given proper consideration to such documentary evidence provided by the appellant. When the appellant produced the Certificate from a qualified professional, the Adjudicating Authority is bound to consider and pass a proper order. If the certificate issued is not found to be acceptable, the same is required to be rebutted by the Adjudicating Authority which has not been done in this case. The High Court of Kerala in the case of CADBURY INDIA LIMITED VERSUS UNION OF INDIA AND COMMISSIONER OF CUSTOMS, 2014 (12) TMI 403 - KERALA HIGH COURT has held While a certificate issued by a Chartered Accountant or a Cost Accountant would normally suffice to discharge that burden, if the revenue authorities have any doubt with regard to the genuineness of the certificate or the correctness of it, it is for them to insist on further documents from the claimant to support the certificate issued by the Chartered Accountant or the Cost Accountant. The Department has not rebutted the documentary evidences brought in by the appellant - Appeal allowed on merits. Extended period of limitation - HELD THAT - All the details of Cenvat credit taken by them have been properly disclosed in the ER-1 Returns. There is no allegation that the goods in question were not received in the premises of the appellant. Hence, the question of alleging suppression with intent to evade payment excise duty will not arise. Accordingly, demand in respect of the extended period set aside - appeal allowed even on time bar. Appeal disposed off.

Summary

Issues Involved:
The issue involves the eligibility of Cenvat Credit on raw materials used for manufacturing finished goods supplied to Indian Railways, and the validity of the demand raised by the Adjudicating Authority.

Summary:
The Appellate Tribunal CESTAT KOLKATA heard the case where the appellant, engaged in manufacturing items supplied to Indian Railways, had taken Cenvat Credit on raw materials like MS plates and MS bars for producing finished goods known as MS Fish Plates and Metal Liners. A Show Cause Notice was issued challenging the eligibility of these items as inputs for manufacturing finished goods, seeking recovery of Cenvat credit taken during a specific period. The Adjudicating Authority confirmed the demand, leading the appellant to appeal before the Tribunal.

The appellant argued that the raw materials in question were indeed proper inputs used in manufacturing the finished goods supplied to Indian Railways. They presented documentary evidence, including excise duty paying invoices, accounting records, and a Certificate from a Chartered Engineer confirming the usage of these inputs in the manufacturing process. The appellant contended that the Adjudicating Authority failed to consider this evidence, rendering the order as a non-speaking order. Additionally, they raised the issue of the Show Cause Notice being issued after a significant period, highlighting their regular compliance with filing ER-1 Returns and maintaining proper records.

After hearing both sides and examining the documents, the Tribunal noted that the appellant had accounted for the raw materials, filed ER-1 Returns, and provided a Chartered Engineer's Certificate detailing the usage of inputs in the manufacturing process. Citing a precedent from the High Court of Kerala, the Tribunal emphasized the importance of considering such certificates and held that the Department had not rebutted the documentary evidence provided by the appellant. Consequently, the Tribunal allowed the appeal on merits, setting aside the confirmed demand.

Moreover, the Tribunal agreed with the appellant's argument regarding the proper disclosure of Cenvat credit details in ER-1 Returns and the absence of any suppression to evade excise duty. Therefore, the Tribunal also set aside the demand for the extended period, ruling in favor of the appellant on the issue of time bar as well.

In conclusion, the Tribunal disposed of the appeal in favor of the appellant, emphasizing the proper consideration of documentary evidence and compliance with disclosure requirements.