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2014 (7) TMI 316 - CESTAT BANGALORECENVAT credit - readymade garments (RMG) - Notification No.30/2004-CE dt. 09/07/2004 - availing credit on returned goods under Rule 16 - Held that:- No evidence to show the method of accounting followed by the appellants in this case. The Commissioner (Appeals) seems to presume that Form IV and Form V registers are exclusive to each other. He seems to have come to the conclusion that in the Form IV register the returned goods are not included. There is absolutely no basis for this conclusion. No evidence has been gathered. No statement has been recorded. No accounting procedure has been discussed. The only alternative left is to consider what would be the correct procedure to be followed in accordance with law. Rule 16 deals with returned goods. Whether the returned goods undergo a process of manufacture or not, Rule 16 requires that whatever duty had been paid on the returned goods has to be taken as CENVAT credit and thereafter if the goods have been cleared without undergoing process amounting to manufacture, the credit originally taken should be reversed and if the goods undergo a process of manufacture, duty should be paid on transaction value/MRP based assessments under Section 4A. That being the position irrespective of the process on the returned goods, they have to be necessarily to be added to the inputs account. Therefore, the normal and natural conclusion would be that the same would be added in the Form IV register or the register which is equivalent to erstwhile RG23A part I register. This is a case where extended period could not have been invoked. When the declaration itself has been made, the Department had full opportunity to verify the submissions made by the appellants in the ER1 return within one year. Whether the declaration was made correctly as regards inputs in stock, WRP etc. could have been made. I am aware that suppression of facts/mis-declaration cannot be set aside or ignored merely because the Department had an opportunity to verify and did not verify. But when there is no evidence at all and there is no logical basis for the conclusions reached and no investigation is conducted to bring out the facts or verify important aspects, the only obvious solution would be to hold that extended period could not have been invoked - Decided in favour of assessee.
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