TaxTMI 
TaxTMI 
2021 (7) TMI 1352
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....rstwhile Dankuni Central Excise Division at the premises of the appellant, it was noticed that there was a mis-match between the consumed quantity of inputs between assessee's stock account of raw materials (i.e. RG 23A Pt.1) and ER 6 returns for the period 2012-13 to 2015-16 wherein the consumption as per stock account of major raw materials namely pre form, sugar and essence was higher than the same as per ER 6 returns filed by the Appellant for the above period. The above lead to summons proceeding wherein the Appellant provided detailed workings to show that there was no excess consumption as per stock account and the same merely represented movement of goods within the premises of the Appellant between three units under the same excise registration number and within the same compound manufacturing similar products i.e. aerated beverages and fruit based beverages in all the three units concerned. However, the department proceeded to issue the Show Cause Notice alleging excess availment of Cenvat credit based on consumption of raw materials as per stock account and recovery thereof along with interest and penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with sectio....
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....esent appeal before the Tribunal. 3. Shri Ankit Kanodia, learned Advocate, appeared on behalf of the Appellant. He contended that the recovery of Cenvat credit is not sustainable for the following reasons: (i) There has been no investigation conducted by the department to prove that the Appellant has procured raw materials in excess from what it has availed Cenvat credit on from any of the suppliers and also that there is no allegation as to manufacture of finished goods from such excess consumption of raw materials and clearance of the same without payment of excise duty; (ii) That the demand is based only on the incorrect interpretation of the consumption figures as per the stock account maintained by the Appellant for all the three units under same excise registration number and showing inter unit movement of raw materials between the same vis a vis the consumption as per ER 6 returns filed by the Appellant for the years 2012-13 to 2015-16 without any other substantive allegation; (iii) the adjudicating authority has discussed the inter unit transfer issue of raw materials, yet confirmed the demand without any reasoning as to the same (iv) ....
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....it on differential quantity of inputs which were not at all used for manufacture of their finished products. However it is seen that such allegation is only on the basis of the figure work of the department without production of any other evidences for demand of reversal of Cenvat credit such as any investigations of suppliers of raw materials, recording of input output ratio of the Appellants finished goods etc. Further, the Appellant has produced before us their RG 23 A Part 1 register and a summary of stock account also which clearly depicts that raw materials viz. preform, sugar and essence are used in all the three units of the Appellant under the same excise registration and under the same manufacturing complex. The department has also not objected to the above inter unit transfer of inputs as claimed by the Appellant. A sample stock account for preform as submitted by the Appellant before us as also the lower authorities is depicted below for better understanding of the matter at hand: From the above table if one looks at the stock records of individual units, there is inter unit transfer from UNIT 3 TO UNIT 1 which is included in the total issued quantity of UNIT 3 wh....
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.... iron and steel scrap and CPC charged into furnace for manufacture of mild steel, and no tests to ascertain iron oxide content of sponge iron used, which were the easiest and simplest things to do have been done. In view of this, we hold that merely on the basis of assumptions of the department which are without any basis and the calculations based on these assumptions, the allegations of inflated consumption of pig iron, CPC and iron and steel scrap cannot be made against the appellant and the Cenvat credit demand based on such allegations would not be sustainable. 10. In view of the above discussions, the impugned orders are set aside. The appeals are allowed." 10. Thus going by the above judgment we find that no investigation has been conducted by the department to prove the allegation of excess consumption apart from incorrect assumptions and calculations in the case and thus the recovery of Cenvat credit merely based on differences in figures of consumption cannot be made by the department . 11. Further, on perusal of records, we find that the demand has been raised for the period 2012-13 to 2015-16 in 2017. No explanation has been furthered by the Department in....