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TMI Blog2018 (7) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... decided in favor of appellant. - Excise Appeal No. 50951 of 2018 - A/52402/2018-EX[DB] - Dated:- 14-6-2018 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) And MR. C.L. MAHAR, MEMBER (TECHNICAL) Appellant: Rep. by Sh. S.A. Gundechand, Adv. Respondent: Rep. by Sh. R.K. Mishra, Adv. ORDER PER ANIL CHOUDHARY : The present appeal is filed against the Order-in-Appeal No. IND-EXCUS-000-APP-529-17-18 dated 25.01.2018 passed by the Commissioner (Appeals) Central Excise, Indore. The appellants are engaged in the manufacture of motor vehicle and parts thereof, liable to central excise duty. They were availing credit of duty paid on various inputs in terms of Cenvat Credit Rules, 2004. The dispute in the present appeal is with referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verse any credit on these inputs. He explained that the appellants received large number of duty paid inputs from various vendors. They scrutinized and checked-up standards and qualities of inputs, before taking into account the stock to be used for further manufacture. The inputs, which are not meeting the standards are returned and the credit taken on such inputs are reversed. Some of the inputs, which are issued to the process of manufacture, may also get either damaged or found unfit during the course of manufacture due to various reasons. The processing sections dealing with the inputs prepared a note of rejection and based on that, accounts are accordingly entered. The inputs so rejected during process, become part of scrap. For accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such. 6. Regarding maintenance of accounts, ld. Counsel categorically stated that each one of the transactions in the appellant s unit gets captured in the SAP accounting and it is not correct to say that they have not maintained stock accounts. The appellants are dealing with hundreds of components of various specifications and without the computerized accounting flow, the manufacturing process is not possible. 7. Ld. Counsel contested the demand for extended period and also imposition of penalty. The whole case is based on the records maintained by the appellants. There is no sustainable ground for the allegation of suppression, mis-statement, etc. 8. Ld. AR contested the grounds of appeal. He stated that the complete write off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ully, the Revenue alleged that no credit is eligible on the same. The credit already taken should be reversed. I find that the whole issue narrows down to the point whether or not the inputs were used for intended purpose. Once it is recognized and established that the inputs have been put to intended purpose, it is not relevant whether some of them get damaged or rejected during the course of manufacture. Such damaged input/rejection resulting in scrapping of such inputs will have no impact on the credit availed on them. In other words, the eligibility of the credit on the inputs, which are in fact put to intended use, cannot be questioned for any other reason. In the present case, admittedly, the appellant written off the full value of so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chennai. (4) 2010 (259) ELT 64 (Tribunal-Chennai) Lakshmi Ring Travellers (CBE) Ltd. Vs. CCE, Coimbatore. (5) 2010 (261) ELT 340 (Tribunal-Bang.)- CCE, Bangalore Vs. IFB Automotive (P) Ltd. (6) 2015 (323) ELT 634 (Tribunal-Delhi)- CCE ST, Rohtak Vs. Park Nonwoven Pvt. Ltd. (7) 2016 (339) ELT 265 (Tribunal-Ahmd)-CCE ST, Vapi Vs. Castrol India Ltd. 11. In these cases, the Tribunal held that the credit on inputs, which are rejected during the course of manufacture (line rejections) cannot be denied as they are already put in the process of manufacture. When the duty paid inputs were issued for the process of manufacture and later, during the course of usage, either got damaged or found not upto the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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