2007 (12) TMI 177 - AT - Central Excise

Return back of duty paid finished goods - duly recorded in register - alleged that appellant cleared duty paid returned after processing without payment of duty without following procedure u/r 16(1) & 16(2) in spite that assessee was eligible to take credit on the duty paid return goods, appellant has neither availed credit nor paid duty on removal of re-processed goods, which is against the Law - Technical reasons for denying substantive benefit is not called for matter remanded

Summary

Issues:
1. Duty paid finished goods returned without payment of duty.
2. Alleged violation of Rule 16 of Central Excise Rules, 2002.
3. Entitlement to avail Cenvat credit on duty paid return goods.
4. Dispute regarding procedural compliance and Cenvat credit.

Analysis:

Issue 1:
The case involved the return of duty paid finished goods to the factory and subsequent clearance without payment of duty, leading to the Central Excise officers' notice.

Issue 2:
The appellant argued that they were entitled to take credit on duty paid return goods under Rule 16 of Central Excise Rules, 2002, and had recorded the transaction in the Form-V register. The Commissioner (Appeals) agreed that the appellants could avail Cenvat credit under Rule 16, but the adjudicating authority found a procedural lapse under the same rule.

Issue 3:
Rule 16 allows credit of duty on goods brought to the factory, subject to certain conditions. The Tribunal referenced a previous case to emphasize that credit should not be denied based on technical reasons, especially when the purpose of the scheme is to be promoted. In this case, the appellant had recorded the receipt and utilization of duty paid return goods in their Form V register, indicating entitlement to Cenvat credit.

Issue 4:
The Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for verification of documents and registers to ensure compliance with the law. The decision highlighted the importance of examining the records to determine the validity of the appellant's claim for Cenvat credit under Rule 16.

This detailed analysis of the judgment addresses the issues related to the return of duty paid goods, procedural compliance under Rule 16, entitlement to Cenvat credit, and the Tribunal's decision to remand the case for further verification.