2023 (4) TMI 1014 - AT - Central Excise

SSI unit wins CENVAT credit appeal for duty paid raw materials with valid challans.

M/s. Zeus Plastics Private Limited Versus Commissioner of Central Excise, Kolkata-I

M/s. Zeus Plastics Private Limited Versus Commissioner of Central Excise, Kolkata-I - TMI Issues involved:The issues involved in the judgment are the entitlement of the Appellant to avail CENVAT Credit of duty paid on raw materials received, the admissibility of challans as documents for CENVAT credit, and the proper verification of duty paid nature of raw materials supplied by M/s. B.S. Enterprise.Entitlement to CENVAT Credit:The Appellant, a SSI unit manufacturing plastic articles, received raw materials from M/s. B.S. Enterprise and manufactured final products without taking credit of duty paid on the raw materials. The Department contended that the value of clearances to M/s. B.S. Enterprise should be included in the turnover for SSI exemption limit computation. The Appellant claimed they should be allowed to avail CENVAT Credit as they paid duty on final products, including raw material cost and job charges. The Adjudicating authority rejected their claim citing improper documents for CENVAT Credit under Rule 9 of the CENVAT Credit Rules. The Appellant challenged this decision, arguing that the duty paid nature of raw materials was established through challans issued by M/s. B.S. Enterprise.Admissibility of Challans for CENVAT Credit:The Appellant contended that the Ld. Commissioner(Appeals) did not provide further discussion on the merits of the Adjudicating authority's decision, making the order unsustainable. They relied on precedents such as Union of India v. Marmagoa Steel Ltd. and Commissioner of Central Excise, Coimbatore v. Sonal Vyapar Ltd. The Tribunal found the decision in the latter case relevant, emphasizing that credit can be allowed based on stock transfer invoices when the duty-paid nature of raw material is not in dispute. Rule 9 of the CENVAT Credit Rules allows for credit even if documents lack certain details. The Tribunal concluded that the challans issued by the Appellant could be eligible documents for availing credit, provided the duty paid nature of raw materials from M/s. B.S. Enterprise is verified.Verification of Duty Paid Nature of Raw Materials:The Tribunal observed that the Impugned Order lacked findings on verifying the duty paid nature of raw materials supplied by M/s. B.S. Enterprise. Therefore, the Order-in-Appeal was set aside, and the issue was remanded back to the original Adjudicating authority for proper verification of duty paid documents. The Tribunal directed the matter to be reconsidered based on the duty paid nature of raw materials received from the supplier.This judgment highlights the importance of proper documentation for availing CENVAT Credit and the necessity of verifying the duty paid nature of raw materials to determine eligibility for credit.