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TMI Blog2010 (10) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... be denied on the ground that part of the input is contained in waste, stand distinguished by the Commissioner on the ground that in the Erstwhile Central Excise Rules, there was a specific Rule 57D, which is absent from the present Cenvat Credit Rules - Commissioner has observed that providing a copy of the balance sheet to the Revenue does not discharge their responsibility of providing all the relevant information to the department - The appellant having entered the entire raw materials as also the final product in the statutory records and having cleared the goods under the cover of central excise invoices, cannot be held to have suppressed or misstated anything with an intent to evade payment of duty - Decided in the favour of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt during the financial year 2004-2005. Notice also proposed to confirm interest and impose penalties. 4. The said show cause notice stands culminated into impugned order passed by Commissioner of Central Excise, Ahmedabad confirming the demand, as proposed in the notice, by denying the modvat credit as also imposing penalty of identical amount in terms of Rule 15 of the Cenvat Credit Rules, 2004. The said order passed by the Commissioner is impugned before us and stands assailed by the appellant on merits as also on limitation. 5. It stands strongly contended by the appellant that the duty paid plastic granules i.e. the main raw material and the other inputs were duly accounted for by them in their stock account and were used in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als including excise duty in their balance sheet, does not carry any weight in as much as they have not taken any depreciation on the said value under the Income Tax Act. Learned advocate has also challenged the impugned order of Commissioner on the ground of limitation by submitting that all the inputs as also the final product was duly accounted for in their statutory records maintained by them and central excise returns were being regularly filed by them. Further the fact that the inputs were capitalized in their balance sheet is also supposed to be in the knowledge of the department in as much as balance sheet is a public document. He has also relied upon various decisions laying down that where the information is given in the balance s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em on payment of duty. In this scenario the Tribunal s judgment in the case of Reliance Industries has no applicability. As rightly contended by the learned advocate, there was no final product accounted for in the case of Reliance Industries and no duty was paid on the same. In fact we find that the Tribunal in the case of Commissioner of Central Excise, Delhi v. Duracell (India) Pvt. Ltd. reported in 2001 (137) E.L.T. 882 (Tri. - Del.) has observed that inputs used for trial production of finished goods which eventually turned into waste and scrap is required to be considered as eligible inputs for the purposes of modvat credit. The Tribunal observed that such inputs are used in or in relation to manufacture of final product regardless of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are contained in waste. In fact there being no specific provision to the effect that input credit is to be denied in such a scenario, the benefit would go to the assessees and not otherwise. 10. In view of our above discussion, we do not find any justifiable reason to disallow the modvat credit on the inputs used during the trial runs, emerging in production of final products, which stand cleared on payment of duty. 11. Having held in favour of the assessees, we find that issue of limitation is only of academic interest. Nevertheless we proceed to decide the same. The Commissioner in his impugned order has observed that - even though, the law does not require separate maintenance of accounts, the said assessee should have kept so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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