2023 (10) TMI 385 - AT - Central Excise

Reversal of CENVAT Credit - inputs used in the manufacture/body building of vehicles on duty paid chassis supplied by NEKRTC, BMTC - benefit of Notification No. 6/2006- CE dated 01/03/2006 Sl. No. 139(i). HELD THAT - From the records, it is found that even though these documents have been submitted before the authorities below, however, no cognizance has been taken nor any finding on the same recorded to ascertain the claim of the appellant on facts as to whether separate accounts were maintained in availing credit on inputs used by the appellant in fabrication of vehicles cleared to M/s. Ashok Leyland and NEKRTC relating to 55 vehicles. Therefore, it remained to be examined whether in fact the appellants have availed cenvat credit on inputs used in or in relation to the manufacture of 55 vehicles as alleged in the notice or their claim of non-availment is correct. There are force in the contention of the learned Advocate for the appellant that even though the audit team has recorded an observation that the appellant had availed cenvat credit on inputs used in the manufacture of 55 vehicles cleared to NEKRTC and others but details have not been furnished to the appellant substantiating the said objection. It is prudent to remand the matter to the adjudicating authority to ascertain the fact in the light of the Annexure H I submitted by the appellant in support of their claim that separate accounts were maintained for the inputs used in connection with bodybuilding activity carried out for M/s. Ashok Leyland and inputs used in the manufacture of 55 vehicles in question, where no cenvat credit availed - Appeal allowed by way of remand.

Summary

Issues:
The appeal is filed against Order-in-Appeal No. 243/2010 passed by the Commissioner of Central Excise (Appeals-II), Bangalore.

Facts:
The appellants are engaged in body building/manufacture of motor vehicles under Chapter Sub Heading 8702 9099 of Central Excise Tariff Act, 1985. They undertook body building activity for M/s. Ashok Leyland Ltd. and M/s. NEKRTC on duty paid chassis. They availed cenvat credit on materials for body building for Ashok Leyland but not for NEKRTC. After an audit, they reversed cenvat credit of Rs. 4,14,000/- for NEKRTC. A show-cause notice was issued alleging wrongful exemption availed for 55 vehicles cleared to NEKRTC. The demand was confirmed with interest and penalty, leading to the present appeal.

Arguments:
The appellant argued they did not avail cenvat credit for NEKRTC vehicles and maintained separate accounts. They submitted documents supporting their claim, which were not considered by the authorities. They argued that the reversal of cenvat credit should not be considered as availing credit, citing relevant judgments.

Decision:
The Tribunal found that the authorities did not consider the documents submitted by the appellant. It was not determined whether cenvat credit was actually availed for the NEKRTC vehicles. The matter was remanded to the adjudicating authority to examine the facts based on the documents provided by the appellant. The appellant was granted a reasonable opportunity of hearing. The appeal was allowed by way of remand to further investigate the issue.

(Order Pronounced in Open Court on 10 / 10 / 2023)