Excise credit claims require proof of actual input use; absence of separate accounts alone does not bar reconsideration on merits.

Non-maintenance of separate accounts and inventory did not, by itself, justify outright rejection of the excise credit claim where the real issue was whether the inputs were actually used in the manufacture of exported goods. The mismatch between invoice descriptions and the stock register meant the claimant first had to establish identity of the goods and substantiate the claim with evidence. Fairness required a fresh opportunity to prove entitlement on merits, so the rejection was set aside and the matter remanded for reconsideration by the adjudicating authority.

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Issues: Whether the appellant's claim for credit deserved rejection merely because separate accounts and inventory were not maintained, and whether the matter should be remanded to permit proof of actual use of inputs in exported goods.

Analysis: The claim was not found to have been rejected solely for non-maintenance of separate accounts. The decisive concern was that, without separate accounts, it was difficult to verify whether the inputs for which credit was claimed had actually been used in the manufacture of exported goods. The record also showed a mismatch between the description of goods in the invoices and the stock register, which required the appellant first to establish identity of the goods. In these circumstances, fairness required giving the appellant an opportunity to substantiate the claim on merits before the adjudicating authority.

Conclusion: The rejection could not be treated as resting only on the absence of separate books, and the appellant was entitled to a fresh opportunity to prove its claim. The order was set aside and the matter remanded for fresh decision.

Final Conclusion: The dispute was sent back for reconsideration so that the appellant could independently establish entitlement to the credit claim on evidence.

Ratio Decidendi: Where entitlement to excise credit depends on verification of actual use of inputs, non-maintenance of separate accounts may justify doubt but does not, by itself, preclude a claimant from being afforded an to prove the claim on merits.

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