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TMI Blog2018 (5) TMI 1712X X X X Extracts X X X X X X X X Extracts X X X X ..... led principle that the substantive benefit of CENVAT cannot be denied for procedural lapses - Credit of duty paid on the returned goods under Rule 16 allowed. Penalty u/s 11AC - element of fraud, collusion, wilful misstatement etc. not present in the SCN - Held that:- in para 6 of the SCN not only is there an allegation of irregularity but there is also an allegation of evasion of duty of excise on all the four counts - penalty not imposable. CENVAT credit - inputs found short - case of appellant is that there was some process loss - Held that:- Appellant relied upon the case laws of the Tribunal HINDUSTAN COPPER LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BELAPUR [2012 (9) TMI 858 - CESTAT MUMBAI]. These case laws pertain to cases wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in their RG23 Part- I Register that the goods were returned by their customers and were accounted for. Therefore the CENVAT credit of these goods is ineligible and has to be recovered. b) The appellant stopped production after March 2012. Their RG 23-A part II register was verified and it showed a negative balance of ₹ 12,613/- which shows that they have cleared goods debiting duty form RG 23 A Part-II, when none was available. It was proposed to recover this amount under Section 11 AA along with interest. c) After March 2012, the appellant stopped production and there were no clearances. The closing balance of the finished goods as per their records was 1909 Kgs which were not available when physically verified. It was propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid as if such inputs are received as inputs under CENVAT Credit Rules 2004 and he can utilise the credit according to the said Rules. He argues that although they have not entered the details of the receipt of goods in their RG 23 A part-I, they have maintained a separate register showing the receipt and have taken credit of the duty paid in their RG 23A Part-II. Not entering the details in input stock register RG 23A part I is at best a technical mistake and they should not be denied substantive benefit of the credit for such a mistake. Regarding the negative balance of CENVAT credit, the appellant is not disputing the duty and interest and is only contesting the penalty imposed under Section 11AC. The ingredients like collusion, wilful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had produced invoices before the adjudicating authority on the basis of which they had taken credit and also a separate register maintained by them for the purposes. The adjudicating authority recorded in his order-in-original that on perusal of the register, which was submitted vide annexure-1 it is observed that they have maintained a separate register for returned goods but the same was not incorporated in the input stock register of RG 23 A Part-1. The adjudicating authority denied credit on these goods as they have not followed the requirement under Rule 16 of Central Excise Rules read with Rule 9 of CENVAT Credit Rules. The Commissioner (Appeals) also took the same stand and supported such denial. I find that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ratio does not apply to this case because allegation here is that whatever stock of raw-material was shown in the register by the appellant was not found in stock when physically verified. I find no force in the arguments of the appellant that we should presume that he had wrongly entered the figures and then assume a process loss and then assume that the stock found is attributable to such process loss and allow credit for the same. When the department checked the stock and found that 35.525 MTs of raw-material was not available physically but was available in their RG23A Part-I register, the appellant is liable to reverse the credit or pay duty equivalent to this amount. 5. In conclusion, the appeal is partially allowed modifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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