2017 (3) TMI 1582

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....t were found to be short during the period from April 2004 to March 2007 during physical stock-taking and based on the cost audit report. 2. It is the contention of Revenue that the appellant is entitled to avail CENVAT credit only to the extent that the inputs are actually utilized in manufacture and that the burden of establishing legitimate use devolves on the assessee by proper accounting. It is further contended that first appellate authority had, inappropriately, placed reliance on the decision of the Tribunal in Maruti Udyog Limited v. Commissioner of Central Excise, Delhi - III [2004 (173) ELT 382 (CESTAT)] which was overruled by Hon'ble Bombay High Court in Commissioner of Central Excise & Customs, Aurangabad v. Greaves Cotton L....

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....e Maruti Udyog Ltd was not binding upon the High Court and appeared to have been motivated by sympathy without reference to legal provisions and that the scope for mischief by the assessee in accounting entries could not be ruled out. Other decisions were also relied upon. 4. The Tribunal, in Philips Carbons Ltd v. Commissioner of Central Excise, Bolpur [2013 (29) STR 217 (Tri.-Kolkata)], upheld the denial of credit, not for failure to account, but for having written off inputs in its accounts without simultaneous reversal of credit; obviously, acknowledged non-existence of inputs is sufficient ground for denial. In Commissioner of Central Excise, Indore v. Pithampur Alloys Casting Ltd [2014 (314) ELT 113 (Tri.-Mumbai)], CENVAT credit wa....

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....on'ble Tribunal in the case of M/s Maruti Udyog v. CCE, Delhi - III cited at [2004 (173) ELT 382 (CESTAT)]. In the above case CESTAT held that "Cenvat/Modvat on the input-shortage to the extent of small fraction of 0.24% of the total input received, noticed on account of physical stock verification, and remained un-recorded, being within tolerance limits as fixed by the efficient management and certified to be within norms by qualified account Professionals it would be unreasonable and unfair for the tax authorities to take a different view. No evidence of any illegal/diversion of input credit not -deniable. Demand not sustainable Rule 57-I of erstwhile Central Excise Rules, 1944 - Rule 14 of Central Excise Rules.' 7. In view of this fin....