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2015 (7) TMI 1171 - CESTAT NEW DELHIReversal of CENVAT credit - process loss - job work - processing of sugar - whether, the appellant is required to reverse the cenvat credit on the quantity of finished goods short received in the factory from the job worker’s premises, which is attributable to the process loss at the factory of the job worker? - Held that: - Rule 3 of the Cenvat Credit Rules, 2004 permits a manufacturer to take cenvat credit of duties paid on the inputs received in the factory of manufacture of final product. Since Cenvat credit has been taken by the appellant on the quantity received, as indicated in the Bill of Entry, taking of such credit is in conformity with the requirement of Rule 3 ibid. No stipulation/ embargo has been created in the cenvat statute that in case of process loss happened at the factory of the job worker, the recipient/principal manufacturer is required to reverse the cenvat credit. In absence of any specific provisions contained in the statute, requiring the manufacturer to reverse the cenvat credit, in such an eventuality, I am of the view that the cenvat credit already reversed by the appellant before issuance of the SCN and subsequent claim of the said credit by way of filing of refund application, is the proper course of action taken by the appellant for restoring such credit. Further Rule 4(5) (a) ibid provides for reversal of cenvat credit, in the possible event, where the goods have not been received from the job workers premises. The said provisions nowhere suggest that in case of process loss, the manufacturer is also required to reverse the cenvat credit. Thus, in absence of any specific stipulation being contained in the cenvat statute for reversing the cenvat credit attributable to the shortage in the quantity received in the factory on account of process loss, denial of cenvat benefit is not proper and is contrary to the statutory mandates. Compliance of with the requirements of Rule 16 ibid - Held that: - I find from the available records that the Jurisdictional Assistant Commissioner has granted the letter permission to the appellant for sending the goods to the job worker and has also prescribed the conditions therein, which have been duly complied with by the appellant. I am of the considered opinion that rejection of refund claim by the Authorities below is not legal and proper. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant with consequential benefit of refund.
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