2014 (8) TMI 532

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.... under invoices raised by the buyers. On receipt of the rejected/sale return goods from their buyers/customers for repairs or reconditioning, assessees have taken credit of the duty paid on the buyers invoices under which they have received back the rejected/sale return goods and made entries in the input register and input credit register. On further follow up with the assessees and examination of the assessees sales accounts for the years 2006-07, 2007-08, 2008-09, 2009-10 and 2010-11 (upto June 2010), it is observed that the assessees have received back such rejected goods (sales returns) valued at Rs. 23,83,260, Rs. 33,30,503/-, Rs. 28,02,236-, Rs. 39,24,724/- and Rs. 3,04,598/- respectively and during the above period and have taken Ce....

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....t it was the appellants obligation to maintain proper records in respect of returned goods and the submission that they had taken CENVAT credit and thereafter goods were reprocessed and cleared and therefore no duty was payable cannot be accepted unless it is shown that the returned goods were actually accounted for in accordance with law. It was the submission of the learned counsel that there was no need for the appellant to maintain separate accounts at all. 3. Rule 16 of Central Excise Rules reads as under:           1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason....

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.... would be applicable in respect of the returned goods also. As far as inputs are concerned, the assessee is required to show that inputs have been received, accounted for, utilized in the manufacture to avail the credit. Therefore it was the bounden duty of the appellant to maintain proper accounts of the inputs in this case also. Since it is the claim of the appellant that these returned goods were reprocessed and cleared, the assumption that in the absence of a proper accountal of returned goods, the claim of reprocessing cannot be accepted prima facie cannot be faulted with. Therefore we consider that appellant has not made out a prima facie at all. Under these circumstances we consider that the decision of the Commissioner (Appeals) req....