TaxTMI 
TaxTMI 
2006 (2) TMI 340
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....Rs. Kgs. Rs. Rs. Rs. 1. YARN (Avg. Yarn Cost- Rs. 128.94) 92718.500 11954860 92718.500 11954860 10400290 832023 2. FABRICS (5% Avg. Process loss) 540039.690 87364645 568462.800 73297593 63766221 5101298 3. FINISHED GOODS 717214 (Unit) 166169467 721691.496 93054902* 80954356 6476348 4. SEMI- FINISHED GOODS 146967.6 (Unit) 23182720 125856.243 16227904 14117682 1129415 5. STOCK IN TRANSIT (a) FABRICS (5% Avg. Process loss) 17959.970 5417443 18905.200 2437636 2120654 169652 (b) FINISHED GOODS 652 (Unit) 329740 1790.119 230818 200803 160064 GRAND TOTAL 294418875 1529424.358 197203713 1715560007 13724801 Later, from the Cenvat credit returns filed by the party, it appeared to the department that they had availed extra credit on 5% of the weight of fabrics, semi-finished goods and finished goods declared above, treating such 5% of the weight as "process loss" of input. The extra credit amounted to Rs. 7,06,433/-, and the same was proposed to be disallowed to the assessee, in a SCN, wherein a penalty was also proposed on ....
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.... credit returns. Ld. counsel pointed out that such return for the month of April, 2003 should have been filed on or before 10-5-03 in terms of Rule 7(5) of the Cenvat Credit Rules, 2002. Hence 10-5-03 was the 'relevant date' determined in terms of Section 11A(3)(ii)(a)(B). The SCN was issued beyond one year from this date. Hence the plea of limitation. 4. Ld. SDR, contesting this plea of limitation, submitted that, in the facts of this case, the relevant date, for the purpose of recovery of credit under Rule 12 of the CENVAT Credit Rules, 2002, could only be determined in terms of Section 11A(3)(ii)(a)(A) inasmuch the appellants had actually filed Cenvat credit returns. These returns (for the months of April, May and June, 2003) were filed on 17-7-03 along with quarterly return in ER-1 Form filed under Rule 12 of the Central Excise Rules, 2002. The SCN was issued within one year from 17-7-03 and hence the demand was in time. It was also pointed out by ld. SDR that the party had never raised the plea of limitation earlier. It was argued that they could not raise a mixed question of fact and law at this stage. In this connection, ld. SDR relied on the Tribunal's decision in S.S....
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....il credit equal to the duty paid on inputs of such finished product, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of inputs (whether lying in stock or in process or contained in finished products lying in stock) and subject to availability of the document evidencing actual payment of duty thereon." There is no dispute with regard to inputs lying as such in stock as on 31-3-03. The same is the position with regard to the inputs contained in the finished goods lying in stock as on the said date. The controversy is in respect of "in-process materials" viz. fabrics lying in stock as on the said date. The assessee's argument is that not only the actual physical input content of the fabrics but also the quantity of input lost in the course of conversion of inputs into the fabrics should also be taken into account for Cenvat credit purpose under the above rule. The Revenue is opposed to the proposal to include the input which became waste during the course of the above conversion, for cenvat purpose. I find much force in this opposition inas....
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....e inputs physically present in stock, whether as such or as contained in fabric or as contained in semi-finished/finished goods. 8. For the reasons stated above, I hold that the appellants were not entitled to claim Cenvat credit under Rule 9A in respect of any input which was not present in stock as such or as contained in fabrics or as contained in semi-finished/finished goods as on 31-3-03. 9. Ld. Counsel has pointed out, with reference to the declaration dated 23-5-2003 filed by the assessee under sub-rule (4) of Rule 9A, that they had not claimed or availed Cenvat credit, in relation to semi-finished and finished goods, on any quantity of input in excess of what was physically contained in such semi-finished/finished goods present in stock as on 31-3-03. It was only in respect of fabrics in stock or stock-in-transit as on 31-3-03 that they had taken Cenvat credit on an extra quantity of 5% of actual quantity in physical stock as on 31-3-03. The assessee's grievance is that the lower authorities proceeded on the premise that extra credit had been taken in respect of all the materials viz. fabrics, semi-finished goods and finished goods. If this is true, the error ne....
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....Rules, 2002, such return for any calendar month should have been submitted within 10 days from the close of such month. Thus, in respect of April, 2003, the Cenvat return should have been filed on or before 10-5-2003. Similarly, the returns for May & June, 03 should have been filed on or before 10-6-03 & 10-7-03 respectively. As against this procedural requirement, the assessee chose to file Cenvat returns for April, May and June, 03 on 17-7-03 only. It appears from the records that the returns were accepted by the department. The delay of filing these returns stood impliedly condoned. In the circumstances, the date on which the Cenvat return for April, 2003 was filed (17-7-2003) should be adopted as the "relevant date" in terms of Clause (A) above as applied, mutatis mutandis, to the procedure of recovery of Cenvat credit. When reckoned from this date, the SCN dated 8-7-04 is found to have been issued within one year. Hence the plea of limitation raised by ld. counsel is liable to be rejected. 11. In the result, it is held that, in respect of the fabrics (in-process inputs) and semi-finished and finished goods which were in stock in the assessee's factory as on 31-3-2003, th....