TaxTMI 
TaxTMI 
2010 (10) TMI 447
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....ure of aluminum foil backed plastic films and multilayer films. 2. The audit raised an objection to availment of modvat credit in respect of inputs used in the trial runs of manufacture of their new product. It was found that the appellant had used various raw materials worth Rs. 8 crores approximately in the trial run during the period January 2004 to March 2005. The audit also observed that the appellant have capitalized the raw materials in their balance sheets and as such there were not entitled to avail the modvat credit. It may be observed here that such use of inputs during the trial runs has resulted in emergence of the final product, which was cleared by the appellant on payment of duty. 3. On the above basis procee....
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....d on payment of duty, the relevant provisions of Cenvat Credit Rules stand satisfied by them and there was no occasion for the Revenue to deny the credit of duty paid on the inputs. 6. Learned advocate has also submitted that the Commissioner's reliance on the Tribunal's decision in the case of M/s. Reliance Industries Ltd. [2004 (173) E.L.T. 106] laying down that credit of duty paid on the inputs used during trial run is not available, is misappropriated, in as much as in the case of Reliance Industries the final product emerging during the trial run basis was not accounted for and were cleared without payment of duty. It stands contended before us that in as much as they have cleared the final product after payment of duty, they a....
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....ent of credit of duty paid on the raw materials. 8. Learned DR appearing for the Revenue has reiterated the grounds and has submitted that the Tribunal in the case of Reliance Industries having held that inputs used in the trial run production are not eligible for cenvat credit, Commissioner was justified in denying the credit. He has also submitted that in as much as the appellants have not segregated the production emerging during the trial runs and has not indicated in the records maintained by them, the suppression stands rightly attributed to them by the adjudicating authority and extended period stands rightly invoked. 9. After carefully considering the submissions made by both the sides, we find that the inputs, on wh....
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....e Tax purposes does not seem to be convincing. Whether the appellants have capitalized the cost of the said materials, thus requiring them to be considered as non-fixed assets or not, will not have any bearing on the disputed issue, which is required to be adjudged in the light of the Central Excise Provisions. The appellant's reliance on the decisions laying down that the input credit is not to be denied on the ground that part of the input is contained in waste, stand distinguished by the Commissioner on the ground that in the Erstwhile Central Excise Rules, there was a specific Rule 57D, which is absent from the present Cenvat Credit Rules. He has observed that - "there is no such specific non denial of credit provision under the present....
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....on the said ground. Further the Commissioner has observed that providing a copy of the balance sheet to the Revenue does not discharge their responsibility of providing all the relevant information to the department. It is only discharged when the said assessee provides the relevant information in the method and manner as required under the law. The above finding is self contradictory in as much as the Commissioner has himself observed that there is no requirement under the law to maintain separate records for the goods produced during the trial runs. He has also not referred to any specific provision of law requiring the assessee to maintain separate records or to intimate the Revenue in respect of such production. The appellant having ent....