TMI Blog2017 (5) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... ts maintained by the appellant to this effect is the sole basis for proceedings against them. There is no other evidence to allege that the inputs on which credit has been availed were in fact cleared as such. The credit on inputs, which are rejected during the course of manufacture (line rejections) cannot be denied as they are already put in the process of manufacture is already held in many cases earlier. Denial of credit not justified - appeal allowed - decided in favor of appellant. - Excise Appeals Nos. 50325 and 50326/2017-EX (SM) - Final Order No. 53283-53284/2017 - Dated:- 8-5-2017 - Shri B. Ravichandran, Member (Technical) Shri S. A. Gundecha, Advocate for the appellant Shri K. Poddar, DR for the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect and dismissed the appeals filed by the appellants. 2. Ld. Counsel for the appellants submitted on the following points:- (a) From the beginning, the appellants have been contesting their liability to reverse any credit on these inputs. He explained that the appellants received large number of duty paid inputs from various vendors. They scrutinized and checked-up standards and qualities of inputs, before taking into account the stock to be used for further manufacture. The inputs, which are not meeting the standards are returned and the credit taken on such inputs are reversed. Some of the inputs, which are issued to the process of manufacture, may also get either damaged or found unfit during the course of process of manufacture d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r entered into their system. The value of such inputs are written off as per the Standard Accounting Procedure. The scrap value is added as and when realized, into the credit of their accounts. The inputs may get scrapped due to various reasons like mis-handling by workers, process trial, destructive testing, etc. All these are part of manufacturing process and this scrap so generated and input written off cannot be considered as clearance of inputs as such. 5. Regarding maintenance of accounts, ld. Counsel categorically stated that each one of the transactions in the appellant‟s unit gets captured in the SAP accounting and it is not correct to say that they have not maintained stock accounts. The appellants are dealing with hund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the allegation is that the appellant in their books of accounts, written off the value of some inputs, by debiting material loss of bought-out rejections, which are scrapped. If the appellants have scrapped the items and the value was written off fully, the Revenue alleged that no credit is eligible on the same. The credit already taken should be reversed. I find that the whole issue narrows down to the point whether or not the inputs were used for intended purpose. Once it is recognized and established that the inputs have been put to intended purpose, it is not relevant whether some of them get damaged or rejected during the course of manufacture. Such damaged input/rejection resulting in scrapping of such inputs will have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cases as mentioned below:- (1) 2005 (191) ELT 593 (Tribunal-Delhi) CCE Vs. Lifelong Appliances Ltd. (2) 2006 (199) ELT 876 (Tribunal-Bang.) CCE Vs. BST Ltd. (3) 2009 (237) ELT 730 (Tribunal-Chennai) Titan Industries Ltd. Vs.CCE, Chennai. (4) 2010 (259) ELT 64 (Tribunal-Chennai) Lakshmi Ring Travellers (CBE) Ltd. Vs. CCE,Coimbatore. (5) 2010 (261) ELT 340 (Tribnal-Bang.)- CCE, Bangalore Vs. IFB Automotive (P) Ltd. (6) 2015 (323) ELT 634 (Tribunal-Delhi)- CCE ST, Rohtak Vs. Park Nonwoven Pvt. Ltd. (7) 2016 (339) ELT 265 (Tribunal-Ahmd)-CCE ST,Vapi Vs. Castrol India Ltd. 11. In these cases, the Tribunal held that the credit on inputs, which are rejected during the course of manufacture ( lin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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