2015 (11) TMI 1097 - AT - Central Excise

Availment of CENVAT Credit - returned goods - no intimation about receipt of such rejected goods was given in form D-3 and no separate records were maintained in terms of the provisions of Rule 16 of Central Excise Rules 2002 - Held that - admittedly returned goods were entered in the form of RG-23 as also rejected goods receipt register and stand properly accounted for. Revenue has not rebutted the finding of fact by Commissioner (Appeals) in which case it has to be held that non-filing of D-3 intimation cannot be adopted for denial of substantive benefits otherwise available. As such I find no infirmity in the impugned order of Commissioner (Appeals) and the appeal is accordingly rejected. - Decided against Revenue.

Summary

Issues:
Dispute over availment of Cenvat credit for duty paid on final product returned by customers.

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner (Appeals) regarding the availment of Cenvat credit on duty paid for a final product that was rejected by customers and returned to the factory without payment of duty. The Revenue objected to the lack of intimation in form D-3 and the absence of separate records as required by Rule 16 of the Central Excise Rules, 2002.

The Commissioner (Appeals) ruled in favor of the assessee, noting that the appellant had maintained records in compliance with Rule 16 of the Central Excise Rules. The appellant had produced duty paying documents and maintained records such as RG 23 (Pt.I & II), rejected goods receipt registers, dealers/distributors challans, transport documents, and letterheads, demonstrating proper accounting for the returned goods. The Commissioner emphasized that substantive benefits of the law should not be denied on procedural grounds, and since the appellant had followed the essential procedures, the demand and penalty could not be upheld.

Upon review of the Commissioner (Appeals) order, it was confirmed that the returned goods were appropriately recorded in RG-23 and rejected goods receipt register, indicating proper accountability. The Revenue failed to challenge the factual findings of the Commissioner, leading to the conclusion that the non-filing of D-3 intimation should not be a basis for denying substantive benefits available to the appellant. Consequently, the Tribunal found no defects in the Commissioner (Appeals) decision and dismissed the appeal.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing the importance of substantive compliance over procedural technicalities in matters concerning the availment of Cenvat credit for returned goods. The judgment highlighted the significance of maintaining proper records and following essential procedures to establish entitlement to benefits under the law, ultimately rejecting the Revenue's appeal.