2021 (10) TMI 700

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.... Rs. 65,660/- have been rightly taken on excess receipt of raw material -volatile in nature, whereas the amount of CVD in the bill of entry, is a lower amount; ii) whether the show cause notice is for invocation of extended period of limitation. 2. The brief facts as per the show cause notice dated 1 April 2010 are - during the course of audit of the records of the appellant by the Department for the period 2007 - 08, it was observed that appellant have taken some excess credit of service tax as follows: - i) Rs. 3,175 vide invoice (No. 696 dated 16 August 2008 and No. 1714 dated 18 February 2008) issued by Harshy Enterprises, pertaining to clearing & forwarding charges. The amount shown in the bill have already been re....

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....have taken excess credit of Rs. 65, 660 by calculating duty on the excess quantity received, being 6.595 MT, which is not supported by documents. The details of such credit taken is as follows: - B.E.No.& Date Quantity   Difference Cenvat Amount Actual Qty. of BE Actual Qty. received physically Actual Cenvat Credit shown in B/E 16% 2% 1% 4% 1 2 3 4 5 6 7 8 195690 13.06.2007 95.000 95.205 0.205 8,72,112 17442 8721 - 118298 24.10.07 30.000 32.040 2.040 2,85,747 5715 2858 - 120441/- 09.01.08 60.000 64.350 4.350 585285 11705 5853 -   Cenvat Difference of excess credit taken Actual Cen....

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....the raw material in question is a chemical having volatile nature, and there is bound to be some loss in transit, which is a normal loss. Accordingly revenue is not justified in confirming the demand on the ground that appellant should have taken less credit for the actual quantity of inputs received. Reliance is placed on the ruling of Hon'ble Rajasthan High Court in the case of 'Union of India versus Wheelbarrow Spearing Ltd, 2008 (222) ENT 362 where the facts were that the assessee had received in the factory, the consignment of HFO which was marginally less than the actual quantity stated in the invoice, which was a normal loss on account of transit operation. The assessee had availed the modvat credit on the basis of CVD paid on th....

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.... of the end product. It was further observed that Rule 57 G envisages that such amount of modvat credit availed by the assessee which is evident by the invoices, has inherent correlation with the payment of duty with the goods, covered by such invoices. Thus no curtailment of modvat credit was permissible. Unless the assessee is found to be wrong or in case of diversion of inputs received under invoice, there is no provision to avail lesser modvat credit than what had been proved to have been paid on the entire goods received and used in the factory of the manufacturer. Accordingly this ground is allowed and the demand of Rs. 25, 705 is set aside. 8.3 So far the demand of Rs. 65,660/- is concerned, the learned counsel points out that the....