M/S. Tirupati Structurals Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. GZB-EXCUS/000/APP-247 & 248-13-14 dated 07/03/2014 passed by Commissioner of Central Excise (Appeals) Ghaziabad]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Tirupati Structurals Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& Customs, Ghaziabad

Appearance:

Shri Rajesh Chibber, Advocate for the Appellants

Shri V P Batra, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 28.04.2015

FINAL ORDER NO. A/ 51571 /2015-(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order to deny Cenvat credit to the appellants.

2. The facts of the case are that the appellant is a manufacturer of PVC pipes or part thereof. They are clearing the goods on payment of duty. Sometimes in transportation, goods got damaged and same has been returned by the buyers /customers as defective goods. The appellant takes Cenvat credit on the said goods as defective goods received by them under Rule 16 of the Central Excise Rules. An audit objection was raised that as these returned goods are waste and scrap and on waste and scrap the appellant is not entitled to take Cenvat credit. Therefore Cenvat credit was sought to be denied. In these set of facts, two show cause notices were issued to the appellants to deny Cenvat credit on the returned goods. The matter was adjudicated. The adjudicating authority denied the Cenvat credit and confirmed the demand of duty along with interest and also imposed equivalent amount of penalty.

3. On appeal, learned Commissioner (Appeals) observed that these are not waste and scrap as per records placed before her. But she held that as the appellants has not co-related it with returned goods with the help of invoices. Hence, they are not entitled to take Cenvat credit and therefore denied the Cenvat credit. Against the said order, appellant is before me.

4. Learned Counsel for the appellants submits that sole allegation against the appellant is that they have taken Cenvat credit on the invoices issued by buyers /customers for waste and scrap /ash which is not entitled to avail Cenvat Credit on the same. Therefore Cenvat Credit is not allowable. He also submits that in the impugned order, learned Commissioner (Appeals) has given clear cut finding that these are not waste and scrap as observed by the adjudicating authority. Therefore, the credit be allowed and learned Commissioner (Appeals) cannot go beyond the allegation alleged in the show cause notice. Therefore, impugned order qua denial of Cenvat credit is to be set aside.

5. On the other hand, learned AR submits that learned Commissioner (Appeals) has examined each and every document produced by the appellant and thereafter arrived at a decision that appellant could not co relate and description also mismatch. In the circumstances, Commissioner (Appeals) has correctly denied the Cenvat credit.

6. Therefore, he submits that appeal be dismissed.

7. Heard the parties. Considered the submissions.

8. On perusal of the show cause notice, I find that only allegation against the appellant is that they have not received the rejected goods and received only waste and scrap /ash on which they have taken Cenvat credit which is not permissible and said fact has been examined by the learned Commissioner (Appeals) who has observed as under:

.. A perusal of the said details and documents available on record shows the return of the rejected material like PVC Foam Board/ sheet, PVC Fitting, PVC Pipes, HDPE Pipes, PVC Elbow, PVC Duct Pipe etc. I find that none of the related documents show the receipt of waste and scrap in the instant period as held by the adjudicating authority in the impugned order. Thus I do not agree with the conclusion made by the adjudicating authority in the impugned order that the returned goods were in form of waste and scrap or broken form instead of finished goods.

9. The observation of the learned Commissioner (Appeals) has been accepted by the Revenue and not challenged before me. Therefore, said observation of the learned Commissioner (Appeals) has attained finality wherein it has been held that goods returned by the appellant are not waste and scrap/ash and they are rejected goods. Therefore, the show cause notice is not sustainable in the eyes of law. Whatever observations were made by the Commissioner after that are not part of the show cause notice. Therefore same is not required to be considered by me. In these circumstances, I hold that appellant has taken Cenvat credit correctly. Consequently the impugned order is set aside and appeal is allowed with consequential relief, if any.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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