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TMI Blog2023 (11) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are subsequently put to use in the manufacture of final products and which have not been fully written off - In the instant case, the Appellant has provided documents pertaining to the utilisation of inputs in the manufacture of final products. The provisions of Rule 3(5B) of erstwhile CENVAT Credit Rules, 2004 are very clear which states that when said inputs or capital goods are subsequently used in the manufacture of their products, the manufacturer is entitled to take the credit of the amount equivalent to the CENVAT Credit paid earlier. Extended period of Limitation - HELD THAT:- In the instant case, the appellant has provided sufficient documentary evidence pertaining to the utilisation of inputs in the manufacture of their final products. As such, the demand of alleged ineligible CENVAT Credit cannot sustain. As the issue is of interpretational in nature, invocation of extended period is not justified as the ingredients required for extending the limitation are not satisfied in this case. Interest and penalty - HELD THAT:- As the demand cannot sustain, imposition of penalty and demand of interest also cannot survive. However, it is to be observed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be entitled to take the credit of the amount equivalent to the CENVAT Credit paid earlier subject to the other provisions of these rules. 2.2 The department was of the view that the Appellant by availing CENVAT credit on Obsolescent material which was earlier debited, had contravened the provisions of Rule 3(5B) ibid and therefore the ineligible credit was liable for reversal. As the Appellant failed to reverse the ineligible CENVAT credit, a Show Cause Notice dated 27.06.2019 was issued to the Appellant seeking to recover the ineligible CENVAT credit in terms of rule 14(1)(ii) of CENVAT Credit Rules, 2004 read with Section 11A(4) of Central Excise Act, 1944 and to levy interest under Section11AA and to impose penalty under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section11 AC of Central Excise Act, 1944. 2.3 The Adjudicating Authority vide the Order-in-Original confirmed the demand of ineligible credit of Rs.34,84,905/- with levy of appropriate interest and imposed equal penalty of Rs.34,84,905/- on the appellant. Aggrieved, the Appellant filed an appeal before the Commissioner (Appeals-I), Chennai who vide Order-in-Appeal No.55/2022 dated 26.09.2022 upheld the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4.4 It was contended that the impugned order had gone beyond the scope of appeal in adjudicating factual issues and holding that the appellant failed to provide the claim through documentary evidence when no such issue was under consideration. The impugned order failed to appreciate that Rule 3(5B) of CENVAT Credit Rules, 2004, was in fact applicable to the Appellant and specifically permits the appellant to take benefit of the same including utilisation of said goods in future. The Appellant submitted that in so far as proof of usage is concerned, they have made a submission before the first appellate authority that what was provided to the Adjudicating Authority was a list of all items with usage upto 28.02.2021 (634 out of 1513) and that as on date more inputs were used for which a fresh list was provided upto 30.06.2022 (1134 out of 1513) and a further list up to date can also be provided. 4.5 It was further contended that the impugned order failed to consider the fact that the goods on which provision to write off was made, is only in pursuance of certain accounting standards and practices and that said goods were continuously used in the course of business. The impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the entire dispute revolves in relation to the interpretation of law including the beneficiary transition provisions and the same cannot be a ground to hold that there has been a suppression of facts by the Appellant. 4.7 The Ld. Advocate filed the latest statement of goods/ materials as on 07.09.2023 on which CENVAT re-credit was availed, demonstrating the subsequent usage of goods in manufacture that were provisionally written off. 4.8 The Appellant had filed copies of various judgements relied in support of their case before the adjudicating and first appellate authority as mentioned below: (i) Pratibha Processors Vs. Union of India [1996 (88) ELT 12 (SC)] (ii) Eicher Motors Ltd. Vs. Union of India [1999](106) ELT 3 (SC)] (iii) Shabnam Petrofils Pvt. Ltd. Vs. Union of India [2019 (29) GSTL 225 (Guj.)] (iv) Sah Petroleums Ltd. Vs. Commr of Customs (Imports), JNCH, Nhavasheva [2017 (358) ELT 483 (Tri.-Mum.)] (v) Principal Commissioner Vs. Gandhar Oil Refinery(I) Pvt. Ltd.[2018 (360) ELT A177 (SC)] (vi) Reliance Life Insurance Company Ltd. Vs. Commissioner of Service Tax, Mumbai [2018 (363) ELT 1050 (Tri.-Mum.)] (vii) Rajasthan Tourism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods are subsequently put to use in the manufacture of final products and which have not been fully written off. In the instant case, the Appellant has provided documents pertaining to the utilisation of inputs in the manufacture of final products. The Appellant had argued that in so far as proof of usage is concerned, they have made a submission before the first appellate authority, a list of all items with usage upto 28.02.2021 (634 out of 1513 items) and later on produced relevant documentary evidence for usage of more inputs upto 30.06.2022 (1134 out of 1513 items). Further, during the course of their written submissions, the Appellant has provided documentary evidence for utilisation of 1156 input items up to 07.09.2023 certified by an independent Chartered Accountant, involving CENVAT credit of Rs.21,40,393/- out of the 1513 materials. As most of the input items which were earlier provisionally written off have been utilised by the Appellant in the manufacture and the remaining input materials are in the process of being used subsequently, I hold that the retaking of CENVAT Credit under the provisions of Rule 3(5B) of CENVAT Credit Rules, 2004 on 30.06.2017 is in or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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