De novo CENVAT credit adjudication requires factual findings; remand non-compliance and bare Rule 4(1) reliance vitiate the order.

In de novo CENVAT credit proceedings, an adjudicating authority must comply with remand directions and record clear factual findings linking the provision invoked to the alleged ineligibility of credit. A demand cannot be sustained merely by referring to Rule 4(1) of the CENVAT Credit Rules, 2004 or by alleging false GRNs without determining whether inputs were received and used under the job-work arrangement. The order was therefore set aside as unsustainable and the matter remitted for fresh adjudication on the appellant's submissions and the factual matrix under the CENVAT credit scheme.

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Issues: Whether the impugned order was sustainable when the adjudicating authority failed to comply with the remand directions and rested the demand on Rule 4(1) of the CENVAT Credit Rules, 2004 without adequate factual findings on receipt and use of inputs in the job-work arrangement.

Analysis: The adjudicating authority was required, in de novo proceedings, to examine the appellant's entitlement to CENVAT credit on the facts and in light of the remand directions. The findings instead focused largely on the alleged preparation of false GRNs and on Rule 4(1), without a proper factual determination of whether the credit was inadmissible on the relevant record. Rule 4(1) governs the timing of availment of credit and does not by itself establish that delivery at a job-worker's premises necessarily defeats credit. The statutory definition of job work was also not applied in a manner that resolved the factual controversy.

Conclusion: The impugned order could not be sustained and had to be set aside for fresh adjudication.

Final Conclusion: The matter was remitted to the adjudicating authority for reconsideration of the appellant's submissions and the factual matrix under the CENVAT credit scheme.

Ratio Decidendi: In de novo adjudication, an order is vitiated where the authority fails to comply with remand directions and records no adequate factual finding connecting the legal provision invoked to the alleged ineligibility of credit.

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