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TMI Blog2016 (3) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... rsal of credit equal to the cenvat credit availed on the input. It is immaterial if the shape & size as well as classification of the input remains the same after rejection. It is different matter if the said rejected barrels are used as such for different purpose. These are considered to be waste for the appellants as these are not qualified as per the quality standard adhered by them. The dept. has not proved that the appellants have received more value from the buyer of rejected barrels than the value shown in the invoices for charging Central Excise duty. It is also not the case that the rejected barrels are recycled & purchased again by the appellants. In view of above, it seems to be more assumption & presumption as pleaded by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents are alleged to have failed to pay duty equal to the duty taken as credit on the inputs cleared as damaged/rejected prior to use in manufacture of final product as prescribed. The Respondents availed CENVAT credit to the tune of ₹ 23,30,388/- on the purchase of total 20934 Nos. of said inputs and paid Central Excise duty to the tune of ₹ 8,92,921/- on as such clearance of the damaged/rejected barrels and drums whereas it appeared that they have to pay an amount equal to the credit availed in respect of such inputs i.e. ₹ 23,30,388/-. Thus, the Respondents have short paid/reversed the duty of ₹ 14,37,467/-. Therefore a show cause notice was issued and the same was adjudicated vide impugned order under which confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. There is no dispute between appellants and department on the rejected inputs at this stage. 2. The second stage of rejection is as under :- (i) As per standard manufacturing and quality policy after filling first four barrels of each product pack are kept separately for QC testing of finished goods. The quality dept then checking of these four barrels. If the results are as per the specifications then the product is moved to finished goods area after packing. But if the finished goods do not match the specifications then the finished goods are removed for reprocessing and the empty barrels once used for filling of finished goods are not used again as per their quality policy and sent to the reject barrels store area. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants, based upon which show cause notice issued confirmed by the lower adjudicating authority since the dept. has not found any hole in procedure adopted by the appellants on receipts, manufacturing, clearance and accounting of transactions which is based on Standard Operating Procedures under which every single material is assigned an unique number/codes as explained by them in their defence reply. In the circumstances as discussed above I do not find any merit in the case, therefore the impugned order is not sustainable under the law. 5. We find that the reasoning and the conclusions drawn by the first appellate authority, as above, unassailable and legally correct. Therefore, we do not find any reason to interfere with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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