2017 (9) TMI 1313 - AT - Central Excise

CENVAT credit - process loss - the appellant sent the duty free inputs to job workers, but the full quantity was not received back in violation of Rule 4(5) (a) of the Cenvat Credit Rules, 2004 - appellant contended that it is a case of process loss - Held that - the appellant failed to produce any evidence before the lower authorities in respect of the processing loss and/or the duty was discharged on waste and scrap. It is noted that the appellant had not informed that they were not receiving the entire quantity of the job-worked material and therefore, extended period of limitation would be invoked - demand upheld - appeal dismissed - decided against appellant.

Summary

Issues:
Demand of Cenvat credit along with interest and penalty for non-receipt of full quantity of duty-free inputs sent to job workers during 2006-07 and 2007-08.

Analysis:
The appellant, engaged in manufacturing automobile and telecom tower components, appealed against the demand of Cenvat credit amounting to ?1,27,182/- along with interest and penalty of an equal amount. The appellant contended that the shortfall in the quantity of inputs received from job workers was due to process loss. The appellant referred to a Supreme Court decision stating that manufacturing processes can lead to the loss of small quantities of raw materials. However, the appellant failed to provide evidence of processing loss or discharge of duty on waste and scrap to the lower authorities. The failure to inform about the incomplete receipt of job-worked material invoked an extended period of limitation. The tribunal noted the absence of evidence supporting the appellant's claim and found the cited case laws irrelevant to the present case.

In conclusion, the tribunal dismissed the appeal, citing the appellant's failure to produce evidence and the inapplicability of the case laws referenced. The judgment was pronounced on 19.04.2017 by Shri P. K. Choudhary, the Judicial Member handling the case.