Tribunal grants Cenvat credit on inputs, processed goods. Process loss denial found unsustainable.

The Tribunal allowed the appeal, granting the appellant the right to avail Cenvat credit on the differential quantity of inputs and processed goods received from the job worker. The denial of credit based on process loss without evidence of diversion was deemed unsustainable, especially considering the absence of mala fide intention or suppression by the appellant. The Tribunal highlighted previous decisions supporting the appellant's position and overturned the impugned order, allowing Cenvat credit for the disputed goods.

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Issues:
Appeal against denial of Cenvat credit on short receipt goods from job worker during June, 2008 to August, 2013.

Analysis:
The appellant contested the denial of Cenvat credit due to short receipt of processed goods from the job worker, arguing that there was no diversion of inputs or processed goods. Losses incurred during processing resulted in a differential quantity of goods received, but without any diversion. Citing a previous case, the appellant asserted that Cenvat credit should not be denied in such circumstances. The appellant also highlighted that the Commissioner (Appeals) allowed Cenvat credit for subsequent periods on similar grounds, further supporting their claim.

The Revenue, on the other hand, reiterated the findings of the impugned order, maintaining the denial of Cenvat credit on the differential quantity of goods.

After considering both sides' submissions, the Tribunal observed that the short receipt of processed goods was solely due to process loss at the job worker's end, with no evidence of diversion of inputs or processed goods. Referring to a previous case, the Tribunal emphasized that loss occurring during the manufacturing process should not lead to denial of Cenvat credit. The Tribunal noted that the reasoning for disallowing the credit was not sustainable, especially when there was no mala fide intention or suppression by the appellant. Consequently, the impugned order was deemed unsustainable, and the appeal was allowed in favor of the appellant, granting them the right to avail Cenvat credit on the differential quantity of inputs and processed goods received from the job worker. The Tribunal also pointed out that the Commissioner (Appeals) had allowed Cenvat credit for similar cases in the appellant's subsequent period, further supporting the decision to set aside the impugned orders.

In conclusion, the Tribunal allowed the appeals, setting aside the impugned orders and granting relief to the appellant in accordance with the law.

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