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2017 (3) TMI 1210 - AT - Central ExciseCENVAT credit - Concast blooms - structural cobbles - rail cuttings - The main grounds of denial of credit are that the said inputs are Mild Steel products which can be used directly for re-rolling - whether the denial on credit was justified when the assessee claims that the denial was solely based on presumptions and surmises - The allegations are mainly about the improbability of selling final product at a loss; electricity and gas consumption being not in line with usage of such raw materials in the furnace; low yield of final product and non-availability of details of transport of raw material Held that: - the findings in the impugned order regarding non-receipt of materials in the factory of the appellant is not justifiable. The appellants submitted yearwise details of purchase of these inputs consumed by them and quantity sold as such during the material period. Even when the items were sold as such, the buyer has used such material for melting purposes. These assertions by the appellant, some of which are supported by the documentary evidence, have not been subjected to cross verification by the officers before proceeding to deny the credit. Further, the presumption that defective concast bloom is a MS item and can be used for rerolling purpose has been contested as incorrect by the appellant. It is the submission of the appellant that even during the visit by the audit officers, the appellants sought to demonstrate the usage of the duty paid inputs in their furnace. Regarding the yield being on the lower side, we note that a verification has been conducted by the Income Tax Department to find out the burning loss in another similarly situated unit. It was recorded that the yield varies from 82.87% to 85.21% - various inferences made in the impugned order, at best can lead to a suspicion regarding possible improprietary on the part of the appellant. However, the same is not sufficient to deny the credit of inputs received, without any corroborative evidence of non-receipt or diversion of received inputs. We find in the present case no such evidence has been brought forward by the Revenue. The inferences based on possible loss on sale, lesser usage of electricity or gas etc. are not sufficient enough to deny credit on inputs which are otherwise legitimately available to the appellant. Regarding non-maintenance of separate inventory of inputs, we find that the inputs were received and records of their receipt was maintained by the appellant. However, the inventory was not maintained individually on different inputs. In our opinion, this by itself cannot lead to the denial of credit on duty paid inputs. Credit allowed - appeal allowed - decided in favor of appellant.
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