TMI Blog2018 (12) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of manufacture. Further it stands contended by them that they are in the manufacture of high precision products to be used for luxury cars, which require 100% sophistication and no manufacturing defects are accepted by the customers - In such a scenario to arrive at a conclusion that the appellant has used more inputs and has availed excess credit, which requires to be reversed by them cannot be upheld. In the absence of any evidence to the contrary that the appellant cleared their inputs “as such” after availing the Cenvat credit of duty and in fact in the absence of any allegation to that effect, there are no justifiable reasons to deny the credit to the appellant merely on the basis of the input output ratio - demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put services under Cenvat Credit Rules, 2004. 3. During the audit conducted for the financial year 2006-07 and 2007-08, the scrutiny of their balance sheets revealed that the ratio of inputs used and finished goods manufactured had wide variations during the two financial years. It was observed that during the period 2006-07 the appellant availed Cenvat credit on the inputs amounting to ₹ 03.00 Crores (approx.) whereas during the period 2007-08 the credit availed was to the extent of ₹ 1.72 Crores. It was further noticed that the production during the period 2006-07 was much lower, though the higher credit was availed, then the production during the financial year 2007-08, even though the less credit was availed. Revenue ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of re-manufacture or sale of such rejected returns, as scraps, received by them during the period 2006-07 to 2010-11, the same were not put to any use and were cleared clandestinely from the factory. The said demand was raised by invoking the longer period of limitation. 6. The show cause notice culminated into the impugned orders passed by the original adjudicating authority confirming the demands to the tune of ₹ 79,71,677/- along with confirmation of interest and imposition of penalty to that extent. Demand of ₹ 1,59,541/- was also confirmed along with interest and penalty. Hence the present appeal. 7. On going through the impugned order we note that the entire case of the Revenue as regards the excess use of inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts occurred during the course of manufacture of their final product, after the same were issued for production. After the issuance of the inputs, an assessee is entitled to the credit even if such inputs gets converted into waste and scrap during the manufacturing line. As such we find that in the absence of any evidence to the contrary that the appellant cleared their inputs as such after availing the Cenvat credit of duty and in fact in the absence of any allegation to that effect, we find no justifiable reasons to deny the credit to the appellant merely on the basis of the input output ratio. Accordingly we set aside the demand along with setting aside of penalty. 8. As regards the denial of Cenvat credit of ₹ 1,59,541/- avail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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