Custom, Excise & Service Tax Tribunal
M/S.Lakshmi Ring Travellers (Cbe) Ltd vs Commissioner Of Central Excise, ... on 30 July, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/608/2009
[Arising out of Order-in-Appeal No.116/2009-CE dated 24.09.2009 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Coimbatore]
For approval and signature:
Honble Ms. JYOTI BALASUNDARAM, Vice-President
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s.Lakshmi Ring Travellers (CBE) Ltd.
Appellants
Versus
Commissioner of Central Excise, Coimbatore
Respondent
Appearance:
Shri S. Kandasamy, Cons. Ms.Indira Sisupal, JDR For the Appellants For the Respondent CORAM:
Honble Ms. Jyoti Balasundaram, Vice-President Date of hearing : 30.07.2010 Date of decision : 30.07.2010 Final Order No.____________ The assessees herein who are manufacturers of textile machinery parts sent cenvat-credited raw materials/inputs/semi-finished goods to certain job workers by following prescribed procedure. Certain inputs were put into the stream of manufacture by the job workers but found to be defective and hence were returned to the assessees as they could not be used further for the manufacture of final products. The assessees raised debit notes on the job workers for the loss incurred due to the fault of the job workers. Show-cause notice dated 18.04.2007 was issued proposing recovery of Rs.52,268/- being the amount equivalent to CENVAT credit on the raw material and raw material contained in the finished goods, together with interest, by applying the extended period of limitation, and also proposing imposition of penalty. The notice was adjudicated by the Assistant Commissioner who confirm the demand together with interest and impose penalty of equal amount, his order was upheld by the Commissioner (Appeals); hence this appeal.
2. I have heard both sides. There is no dispute that the inputs became damaged or defective during process. The CENVAT Credit Rules do not contain any provision for reversal of credit if inputs get damaged in the course of manufacturing process. The question of reversal of credit arises only if the inputs became defective even before put to use. In these circumstances, the fact that the assessees collected an amount from the job workers by raising debit note to the extent of loss occurred, cannot be a ground for demanding reversal of credit. In this view of the matter, I set aside the impugned order and allow the appeal. (Operative portion of the order was pronounced in open court on 30-07-2010) (JYOTI BALASUNDARAM) VICE-PRESIDENT ksr 30-07-2010 ??
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