2017 (7) TMI 13 - AT - Central Excise

CENVAT credit - denial on the ground that the finished products cleared by them and received back by them under Rule 16 of Central Excise Rules, 2002 were scrapped and hence they should have reversed the CENVAT credit availed on such goods - Held that - the assessee have not furnished any documents to correlate that the 3845 Nos. of rocker arm are the same as one which was exported and re-imported vide Bill of Entry No.801664 as the B/E is dated 9.5.2005 and the date of accountal of the said goods in Annexure III is 4.10.2005 and also the quantity received as per Bill of Entry and quantity in Annexure III does not match - Further, the assessee have also not adduced any documentary evidence to show that the said goods were still in stock - credit rightly denied - appeal dismissed - decided against appellant.

Summary

Issues:
Appeal against rejection of CENVAT credit reversal on scrapped goods under Rule 16 of Central Excise Rules, 2002.

Analysis:
The case involved an appeal against the rejection of CENVAT credit reversal on scrapped goods under Rule 16 of Central Excise Rules, 2002. The appellants, engaged in manufacturing automobile parts, were issued a show-cause notice to reverse CENVAT credit on finished products cleared and received back under Rule 16. The Assistant Commissioner confirmed the demand initially, but the Commissioner (A) allowed the appeal in the first round of litigation. However, on de novo adjudication, the Assistant Commissioner rejected the appellant's contention, confirmed the demand, and imposed a penalty. The Commissioner (A) rejected the appeal in the subsequent round, leading to the present appeal before the Tribunal.

The appellant argued that the impugned order lacked legal sustainability as it failed to appreciate Rule 16 provisions. They contended that the demand lacked documentary evidence and violated principles of natural justice by not providing the verification report. The appellant emphasized the absence of a recovery mechanism under Rule 16 and cited relevant case laws to support their position. On the other hand, the AR defended the impugned order, stating that the appellants failed to provide evidence proving reprocessing and correlation between reworked goods and clearances.

After hearing both parties and reviewing the records, the Tribunal found no infirmity in the impugned order. The Commissioner (A) had passed a reasoned order considering all facts, including the report from the Range Officer verifying the facts. The Tribunal highlighted specific findings from the Commissioner (A) regarding the lack of documentary evidence proving reprocessing and reworking of scrapped goods. The Tribunal upheld the Commissioner (A)'s decision, emphasizing the importance of substantiating claims with evidence. The appeal was dismissed, affirming the impugned order's validity.

In conclusion, the Tribunal's decision upheld the rejection of CENVAT credit reversal on scrapped goods under Rule 16. The judgment emphasized the necessity of providing documentary evidence to support claims and the importance of adhering to procedural requirements in such cases. The Tribunal's analysis focused on the legal provisions, evidentiary requirements, and adherence to principles of natural justice in deciding the appeal.