2018 (12) TMI 1021 - AT - Central Excise

Tribunal overturns order on Cenvat credit, no extra docs needed for returned goods

The Tribunal allowed the appeal, setting aside the order confirming a demand under the Central Excise Act. It was established that availing Cenvat credit ... CENVAT Credit - goods returned to the factory for being remade, refine, recondition and for other purposes - Section 16(2) of the Central Excise Rule 1944 - Held that:- There is no need for giving any intimation and the goods are received for being remade, refine and recondition, or for any other purposes. Rules, 16 does not prescribe any such procedure. It has been held in the case of CCE, JAIPUR VERSUS M/S. AMCO INDIA LTD. [2014 (12) TMI 119 - CESTAT NEW DELHI] wherein it has been held that there is no requirement for documents for the goods returned to the factory for the purpose on being remade, refine or recondition or any other purpose. Appeal allowed - decided in favor of appellant. Issues involved:1. Availing of Cenvat Credit on duty paid returned gear boxes in the factory.2. Availment of Cenvat credit on goods returned to the factory for remaking, refining, reconditioning, or other purposes.3. Availment of Cenvat Credit on returned goods under Section 16(2) of the Central Excise Rule 1944.Analysis:Issue 1: Availing of Cenvat Credit on duty paid returned gear boxes in the factoryThe appeal was filed against an order confirming a demand of Rs. 76,02,758 along with penalty and interest under the Central Excise Act. The Department alleged that Cenvat credit was availed without receiving the goods in the factory. However, evidence on record proved the receipt of goods in the factory, which was not disputed by the Revenue. The goods were also cleared from the factory after payment of duty.Issue 2: Availment of Cenvat credit on goods returned for remaking, refining, reconditioning, or other purposesThe issue revolved around availing Cenvat credit on goods returned to the factory for various purposes. Differential duty was paid when goods were sold at higher prices, and credit was reversed for goods sold at lower prices. The Department contended that there was no documentary evidence of goods receipt in the factory under Rule 16 of Central Excise Rules.Issue 3: Availment of Cenvat Credit on returned goods under Section 16(2) of the Central Excise Rule 1944The advocate argued that no specific documentation was required for goods returned to the manufacturer for specified processes under Rule 16. The Department insisted on documents like lorry receipts and GR notes, not prescribed by the rule. It was highlighted that Rule 16 did not mandate informing the Department upon goods receipt for remaking, refining, or reconditioning. Citing legal precedents, it was established that no such documentation was necessary for goods returned for specific purposes under Rule 16.The Tribunal, based on legal provisions and precedents like M/s Banco India and M/s Ferrocrome cases, set aside the impugned order. It was ruled that no intimation was needed for goods received for remaking, refining, or reconditioning, as Rule 16 did not prescribe such a procedure. The appeal was allowed with any consequential benefits.This comprehensive analysis of the judgment highlights the key issues involved and the Tribunal's decision based on legal provisions and precedents, ensuring clarity and understanding of the case.