TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 995
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....ntral Excise, Bangalore. 2. Briefly stated the facts of the case are that the appellant are engaged in the manufacture of Hydro Cyclic Compound, Acrylic Emulsion, Pigment, industrial adhesives etc. falling under Chapters 29, 32 and 35 of the Central Excise Tariff Act, 1985. During the course of verification of their records, it was observed that the appellant during the period June 2011 to September 2012 availed cenvat credit on invoices pertaining to sales returns where the goods have been rejected and returned by the customers due to various reasons. The appellant availed credit on the goods which were stored in the open premises outside the factory building but inside the factory premises. Alleging that the appellant had wrongly availed....
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....turing, the appellant availed cenvat credit on returned goods by the customers in terms of Rule 16 of the Central Excise Rules, 2002. Further, if the material fails the quality control check, it is sold as scrap on payment of duty which is not the subject matter of the dispute. 3.2. He has submitted that in the impugned order, it was presumed by the Department that since the materials were kept without any shed / shelter, exposing to Sun heat, making it non-marketable which could not have been processed being sold as scrap; therefore, admissibility of cenvat credit was irregular. He has further submitted that the customers who had returned the goods along with their original excise invoices, credit notes were issued by the appellant. The r....
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....acture but later recorded that sufficient records were not produced by the appellant. He has submitted that in the proceedings pertaining to the subsequent period from April 2014 to March 2015, this Tribunal had remanded the matter after making prima facie observation that there is correlation between receipt and usage of the returned goods in their factory. Also, the learned Commissioner(Appeals) for the period April 2016 to June 2017 making a prima facie observation about the receipt and utilisation of the returned goods remanded the matter to the adjudicating authority for verification. They have submitted that the demands confirmed on the basis of assumptions and presumptions cannot be sustained. In support, they referred to the judgmen....
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....he entire case was initiated against the appellant on the basis of the audit objection when the visiting audit team observed that the returned goods were lying in open area of the factory exposed to Sun heat and rain and it was considered that the goods became non-usable and accordingly credit availed is irregular. Vehemently opposing such observation of the audit from the very beginning, the appellant has been contesting submitting that they followed the procedure prescribed under Rule 16 of the Central Excise Rules, 2002 when the returned goods are received in their factory. Initial scrutiny was made by their sales persons to examine whether the rejected returned goods received from the buyers due to product manufacturing or product fault....
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....ellant observing that nowhere they have furnished even single documentary evidence to show that the returned /rejected goods after having been reused in the manufacturing process have actually been sold on payment of duty. But we find, in the case of return of 16 drums returned by M/s. Krish Enterprises, after reprocessing of the said 16 drums in 3 batches, the finished goods were cleared by them on payment of duty by raising the invoices. Therefore, analysis of the case of returned goods relating to invoice dated 31.03.2013 of M/s. Krish Enterprises reveals that the appellant had meticulously maintained records of receipt of returned goods, its process and thereafter clearance by them on payment of appropriate applicable duty. Thus, prima ....