TMI Blog2017 (11) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... se of manufacture. Such damaged input/rejection resulting in scrapping of such inputs will have no impact on the credit availed on them - credit allowed - appeal allowed - decided in favor of appellant. - Excise Appeal Nos. 50323 - 50324 of 2017 - Final Order No. 57912 – 57913/2017 - Dated:- 16-11-2017 - Hon ble Mr. Justice (Dr.) Satish Chandra, President And Hon ble Mr. V. Padmanabhan, Member (Technical) Sh. S. A. Gundechand, Advocate for the appellant Sh. R. K. Mishra, AR for the respondent ORDER Per : V. Padmanabhan These two appeals are against order dated 18.11.2016 of Commissioner (Appeals-I), Bhopal. The appellants are engaged in the manufacture of motor vehicle and parts thereof, liable to central excise du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Ld. Counsel for the appellants submitted 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 manufacture due to various reasons. The processing sections dealing with the inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting, 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. 6. 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 hundreds of components of various specifications and without the computerized accounting flow, the manufacturing process is not possible. 7. Ld. Counsel contested the demand for extended period and also imposition of penalty. The whole case is based on the records maintained by the appellants. There is no sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome 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 impact on the credit availed on them. In other words, the eligibility of the credit on the inputs, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces 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 ( line rejections) cannot be denied as they are already put in the process of manufacture. When the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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