2013 (1) TMI 530 - AT - Central Excise

Shortages of re-melted lead ingots and lead blocks involving duty to the tune of Rs.3,68,161/- were detected - Held that - Confirmation of demand of duty in respect of short found inputs is based upon the statements of the appellant s representative but there are no inventories prepared by the Revenue for arriving at the shortages. Also no evidence for clandestine removal of the inputs in question. Mere reliance on the statement of authorised representative which in any case admitted shortages but not clandestine removal, is neither fair nor proper. Cenvat credit on refined lead ingots - Held that - Cenvat credit was availed on the basis of invoices issued by M/s Gravita India Ltd. and were duly entered in RG-23A part 1&2 record, the same were shown as having been utilized in the manufacture of final product. The affidavit of Director also stands placed on records. Thus there is no evidence showing clandestine removal of the said goods. No justifiable reasons to upheld the impugned order, the same is set aside and appeal allowed with consequential relief to the appellant.

Summary

Issues: Denial of Cenvat credit on refined lead ingots, imposition of penalty, confirmation of duty demand for short found inputs.

Analysis:

1. Denial of Cenvat credit on refined lead ingots:
The appellant, engaged in manufacturing refined lead ingots, faced proceedings for denial of Cenvat credit and penalty imposition. The Revenue contended that as the refined lead ingots were the final product, they could not be considered as inputs for availing credit. However, the appellant had availed credit based on invoices from M/s Gravita India Ltd. and recorded the same in their RG-23A records, indicating utilization in the manufacturing process. The absence of evidence supporting clandestine removal of the goods led the tribunal to set aside the impugned order and allow the appeal with consequential relief to the appellant.

2. Confirmation of duty demand for short found inputs:
The Central Excise officers detected shortages of re-melted lead ingots and blocks during a factory visit, resulting in a duty demand of Rs.3,68,161. The appellant's representative initially admitted to the shortages, but later challenged the stock verification, claiming the quantity was under process and not accounted for. The tribunal noted the lack of inventories prepared by the Revenue to determine shortages and the absence of evidence supporting clandestine removal. Relying solely on the representative's statement, which acknowledged shortages but not clandestine removal, was deemed insufficient by the tribunal. Consequently, the tribunal held that the Revenue failed to establish clandestine removal of the short found inputs, leading to the set aside of the duty demand.

In conclusion, the judgment by Ms. Archana Wadhwa of the Appellate Tribunal CESTAT NEW DELHI addressed the issues of denial of Cenvat credit on refined lead ingots and confirmation of duty demand for short found inputs. The tribunal found in favor of the appellant, highlighting the lack of evidence supporting clandestine removal in both instances and ultimately setting aside the impugned order while granting consequential relief to the appellant.