9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 158 - AT - Central ExciseCENVAT Credit - inputs issued for production lying in shop floor but not used for the production and the same was destroyed in fire - remission of duty granted - HELD THAT - The impugned order that the Learned Commissioner has granted the remission of duty in respect of Goods which is in work in progress. It is also not in dispute that the input in question had been issued for production and the same was lying on the shop floor. The same was admitted by the Commissioner in his order. The reason for not granting the remission is that even though the input was issued for production and lying on shop floor but the same was in form of input as such. Therefore, it was contended that the same was not used in the production. Accordingly, the remission was not granted. it is found that even though the inputs were not put to use in the production but the input were issued for the production and was in the progress of use in the manufacturer of final product. Once the input has been issued for the production and lying on shop floor. The same should be treated as work in progress. Consequently, the demand of Cenvat Credit cannot be made. It can be seen that the facts in that and present case is absolutely identical that though the input was not used and issued for production, the demand of Cenvat Credit thereon was set aside - the demand of Cenvat Credit in respect of inputs issued for production and lying in shop floor is not sustainable - appeal allowed - decided in favor of appellant.
Issues:
Whether the appellant is required to pay Cenvat Credit for inputs issued for production but destroyed in fire. Analysis: The issue in this case revolves around the requirement of the appellant to pay Cenvat Credit for inputs issued for production but not used and subsequently destroyed in a fire. The Commissioner held that since the inputs were issued but not used in manufacturing, the appellant must pay the Cenvat Credit amount. The appellant challenged this decision, arguing that even if the inputs were not utilized, they should be considered as work in progress, citing relevant judgments for support. The appellant's counsel contended that once the input is issued for production and remains on the shop floor, it should be treated as work in progress. The appellant relied on judgments such as Pluto Plastics Private Ltd and Another Vs. CCE-2017, RSWM Ltd Vs. CCE-2015, and CCE Vs. Fenner India Ltd. to support their argument. On the other hand, the Joint Commissioner representing the revenue reiterated the findings of the impugned order and cited judgments like BIOPAC INDIA CORPN. LTD. VS. COMMISSIONER OF CENTRAL EXCISE, VAPI and others to support their stance. After considering the submissions from both sides and reviewing the records, the Member (Judicial) found that the input in question had been issued for production and was lying on the shop floor, indicating work in progress. The Member noted that even though the inputs were not utilized in production, they were issued for production and were in the process of being used in the manufacture of the final product. Drawing from the precedent set in RSWM Ltd Vs. CCE-2015, where a similar issue was addressed, the Member concluded that the demand for Cenvat Credit cannot be upheld in cases of work in progress. In the referenced case of RSWM Ltd Vs. CCE-2015, it was established that inputs destroyed during further processing should be considered as inputs in process, rather than as inputs stored as such. The report from the Superintendent confirmed that the inputs were destroyed while in the blow room during processing, supporting the classification of the inputs as under process. Additionally, the appellant's claim for expenses towards dying and process purchases further reinforced the conclusion that the inputs were in the process of being utilized. Consequently, the Member set aside the impugned order and allowed the appeal, providing consequential relief to the appellant. In conclusion, the judgment emphasizes that when inputs are issued for production and are in the process of being used in manufacturing, they should be treated as work in progress. The decision underscores the importance of considering the stage of production in determining the applicability of Cenvat Credit, ultimately setting aside the demand for Cenvat Credit in the case at hand.
|
