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2018 (5) TMI 968 - AT - Central ExciseCENVAT credit - the entire appeal of Revenue is based on the claim that the Commissioner has not correctly quantified the amount of scrap generated and has relied on the quantification done by the job worker - Held that - there is no evidence on record to state that the quantification done by the job-worker is incorrect. It is not in dispute that the job-worker has paid the excise duty on the scrap generated in the premises and has accounted for the Same in the records. It cannot be disputed that the there would be a gain on account of insulation of paper, his claim that there is no loss on account of drawing cannot be considered as correct. Drawing is a mechanical process and there would be definitely a loss in end cutting/ trimming. Appeal dismissed - decided against Revenue.
Issues:
1. Appeal filed by Revenue against dropping of proceedings for demand of reversal of CENVAT Credit and penalty imposition. Analysis: The appeal was filed by the Revenue challenging the Commissioner's decision to drop the proceedings initiated for demanding the reversal of CENVAT Credit and imposing a penalty. The Revenue contended that the job-worker, M/S Bharat Bijlee Ltd., sent bare copper wire rods to M/s KSH International Pvt. Ltd. for job work under specific rules. The Revenue argued that the Commissioner erred in dropping the demand raised on the shortages of material received after job-work, asserting that a significant amount of material was short received, necessitating the reversal of credit. The Revenue highlighted discrepancies in the records produced by the job-worker regarding the scrap generated during the job work process and criticized the Commissioner for not critically examining these discrepancies. The Revenue emphasized that the Commissioner failed to quantify the scrap generated accurately and relied solely on the job-worker's quantification without verifying its accuracy. The Revenue argued that the job-worker's claim of no loss during the wire drawing process was incorrect, as there would inevitably be losses such as end cutting. The Revenue further pointed out that the Commissioner based the decision on Tribunal cases and highlighted the dismissal of an appeal by the Hon'ble Bombay High Court in a related matter. The Revenue's case rested on challenging the job-worker's quantification and the correctness of the Commissioner's decision. In the detailed analysis, the Tribunal scrutinized the Revenue's contentions and the Commissioner's decision. The Tribunal observed that the Revenue's argument primarily revolved around disputing the job-worker's quantification of scrap without providing concrete evidence to prove its inaccuracy. The Tribunal noted that the job-worker had paid excise duty on the scrap generated and maintained proper records, which the Revenue failed to challenge effectively. Additionally, the Tribunal rejected the Revenue's claim of no loss during the wire drawing process, asserting that losses like end cutting were inevitable. The Tribunal also highlighted the Commissioner's reliance on a specific Tribunal decision to support dropping the proceedings, emphasizing that the liability could not be imposed on the principal manufacturer/supplier of inputs. Ultimately, the Tribunal found no merit in the Revenue's appeal and dismissed it, upholding the Commissioner's decision. Therefore, the Tribunal's detailed analysis focused on the lack of concrete evidence provided by the Revenue to dispute the job-worker's quantification of scrap, the inevitability of losses during the wire drawing process, and the legal precedent supporting the Commissioner's decision to drop the proceedings based on the specific Tribunal decision cited. The Tribunal's thorough examination led to the dismissal of the Revenue's appeal, affirming the Commissioner's decision.
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