2017 (2) TMI 972 - AT - Central Excise

Reversal of CENVAT credit - Rule 6(6) of CCR, 1944 - demand on the ground that the appellant has cleared goods without payment of duty to DMRC utilizing the common inputs which are used for both dutiable as well as exempted goods - Held that - duty exemption certificates which are crucial for deciding the matter have not been examined by the Adjudicating Authority as well as the first Appellate Authority, the matter is remanded back to the Adjudicating Authority for examination of these returns and certificates to decide the appellant s claim - appeal allowed by way of remand.

Summary

Issues:
1. Appeal against Order-in-Appeal No. 395/SVS/GGN/2012 dated 16.10.2012.
2. Demand under Rule 6(6) of Cenvat Credit Rules, 1944.
3. Allegations of clearing goods without payment of duty to DMRC.
4. Requirement of separate records for dutiable and exempted goods.
5. Allegations of suppression of non-payment from the department.
6. Examination of excise duty exemption certificates.
7. Remand back to Adjudicating Authority for further examination.

Analysis:
The appeal was filed against Order-in-Appeal No. 395/SVS/GGN/2012 dated 16.10.2012 by the Commissioner of Central Excise (Appeals), Delhi-III, Gurgaon. The appellant, engaged in manufacturing machinery for metro rail projects, faced a demand under Rule 6(6) of Cenvat Credit Rules, 1944. The department alleged that goods were cleared to DMRC without duty payment, utilizing common inputs for dutiable and exempted goods. The appellant was accused of not maintaining separate records or paying the required amount for exempted goods. Furthermore, it was claimed that the appellant suppressed the non-payment fact from the department, violating exemption notification requirements.

The appellant's advocate highlighted that excise duty exemption certificates were submitted to the Adjudicating Authority and the Commissioner (Appeals), but were not examined. The certificates, submitted along with ER-1 Returns, were crucial for the case. As these certificates were not reviewed by the authorities, the matter was remanded back to the Adjudicating Authority. The Authority was directed to examine the certificates, returns, and correspondence to determine if the appellant complied with the exemption requirements. The Adjudicating Authority was instructed to provide a fair opportunity for the appellant to present and defend their case.

In conclusion, the appeal was disposed of by remanding the case for further examination of the excise duty exemption certificates and related documents. The Adjudicating Authority was tasked with evaluating the submissions to decide the matter on its merits, ensuring the appellant's right to a fair hearing and defense.