2017 (6) TMI 159 - AT - Central Excise

CENVAT credit - appellant had taken the credit of duty paid on the goods received from their Durgapur unit and subsequently cleared the same after value addition on payment of Central Excise duty, which is well within the provisions of Rule 16 of the CER, 2002 - case of the appellant is that when the duty has been paid on the clearance of the goods, there should not be any difficulty and dispute in respect of availment and admissibility of credit - Held that - there is a contradiction between the contention of the appellant and the finding of the Adjudicating Authority - the case may be decided without going into the case laws as cited by the ld.Counsel and only on the basis as to whether the appellant had undertaken the process as claimed by the ld.Counsel. So, it is appropriate that the appellant should be given an opportunity to establish the process in any manner before the Adjudicating Authority in the interest of justice - appeal allowed by way of remand.

Summary

Issues:
Demand of inadmissible Cenvat Credit, imposition of penalty on Director and Commercial Manager, irregular availment of credit, imposition of personal penalty, utilization of accumulated credit, lack of documentary evidence, process undertaken by the appellant, contradiction in contentions.

Analysis:
The case involved a dispute regarding the demand of inadmissible Cenvat Credit of a significant amount along with penalties imposed on the Director and Commercial Manager of the appellant company. The appellant had received goods on a stock-transfer basis from their Durgapur unit, cleared them after processing, and claimed credit for the duty paid on those goods. The Commissioner confirmed the demand and penalties, alleging irregular availment of credit and lack of proper documentation supporting the process undertaken by the appellant.

The appellant argued that they had cleared the goods after value addition and payment of Central Excise duty, within the provisions of the law. They contended that the department did not investigate the process undertaken at their unit properly. The appellant emphasized that the duty payment should nullify any irregularity in credit availment. They cited decisions of the Hon'ble High Court of Gujarat in support of their submissions.

On the other hand, the Revenue argued that the goods received by the appellant were finished goods, not inputs, and were not used in the manufacture of final products. They claimed that the credit availed was irregular, and the appellant failed to provide sufficient evidence to justify the process undertaken or the excess carbon content in the goods. The Revenue also highlighted the absence of documentation regarding permission under relevant rules.

After hearing both sides, the Tribunal found a contradiction between the contentions of the appellant and the findings of the Adjudicating Authority. The Tribunal decided to remand the matter to the Adjudicating Authority for a fresh decision based on whether the appellant had actually undertaken the claimed process. The Tribunal emphasized the importance of providing the appellant with an opportunity to establish the process before the Adjudicating Authority in the interest of justice. All issues were kept open for further evidences, and the appeal was allowed by way of remand.

In conclusion, the judgment highlighted the significance of proper documentation, adherence to statutory provisions, and the need for a fair opportunity to present evidence in tax disputes. The case was remanded for a fresh decision based on the clarification of the process undertaken by the appellant.