SIGN IN SUBSCRIBE

News Update

Govt scraps ban on export of onionFormer Delhi Congress chief Arvinder Singh Lovely joins BJP with three moreUS Nurse convicted of killing 17 patients - 700 yrs of jail-term awardedGST - Payment of pre-deposit through Form GST DRC-03 instead of the prescribed Form APL-01 - Petitioner attributes it to technical glitches - Respondent is the proper authority to decide the question of fact: HC2nd Session of India-Nigeria Joint Trade Committee held in AbujaGST - Since SCN is bereft of any details and suffers from infirmities that go to the root of the cause, SCN is quashed and set aside: HC1717 candidates to contest elections in phase 4 of Lok Sabha ElectionsGST - Once Appellate Authority comes to the conclusion that SCN was issued by an officer who was not competent; reply was also considered by an incompetent authority and the Competent Authority had not applied its independent mind, Appellate Authority could not have assumed original jurisdiction and proceeded further with the matter: HC7th India-Indonesia Joint Defence Cooperation Committee meeting held in New DelhiGST - Neither the Show Cause Notice nor the order spell out the reasons for retrospective cancellation of registration, therefore, the same cannot be sustained: HCMining sector registers record production in FY 2023-24GST - If the proper officer was of the view that the reply is unclear and unsatisfactory, he could have sought further details by providing such opportunity - Having failed to do so, order cannot be sustained - Matter remanded: HCAnother quake of 6.0 magnitude rocks Philippines; No damage reported so farI-T - Initial burden of proof rested on assessee to substantiate his claim of having incurred expenditure on improvement of property: ITATTrade ban: Israel hits back against Turkey with counter-measuresI-T - Agricultural income can be treated by ITO as undisclosed income in absence of any substantial / corroborative material to prove same: ITATCanada arrests three persons in alleged killing of Sikh separatistI-T - Income from sale of property has to be classified & characterised only in manner of computation as per section 45(2): ITATCus - When there is nothing on record to show that appellant had connived with other three persons to import AA batteries under the guise of declaring goods as Calcium Carbonate, penalty imposed on appellant are set aside: HCCongress fields Rahul Gandhi from Rae Bareli and Kishori Lal Sharma from AmethiGST -Since both the SCNs and orders pertain to same tax period raising identical demand by two different officers of same jurisdiction, proceedings on SCNs are clubbed and shall be re-adjudicated by one proper officer: HCFormer Jharkhand HC Chief Justice, Justice Sanjaya Kumar Mishra appointed as President of GST TribunalSale of building constructed on leasehold land - GST implicationI-T - Interest received u/s 28 of Land Acquisition Act 1894 awarded by Court is capital receipt being integral part of enhanced compensation and is exempt u/s 10(37): ITATGirl students advised by Pak college to keep away from political events
 
CX - CENVAT - Inputs sent to job worker returned as rejected/spoiled - no cause for denial of credit: CESTAT by Majority

 

By TIOL News Service

CHANDIGARH, MAY 11, 2018: THE appellant is engaged in the manufacture of shock absorbers.

A show cause notice was issued to the appellant seeking to deny cenvat credit of -(a) Rs.6,00,613/- on inputs which were sent to the job worker for processing but received back by the appellant as rejected/spoiled and (b) Rs.67,16,069/- availed on the raw materials/inputs which was not received back from the job workers on account of generation of waste/scrap.

The demand was confirmed and equivalent penalty imposed.

In appeal, the Member (Judicial), on the issue of entitlement of CENVAT credit on inputs that were sent to the job worker but received back as rejected/spoiled, held that the credit is admissible in view of the decision in Asahi India Safety Glass Limited 2004-TIOL-29-HC-DEL-CX .

On the second issue of inputs that were not returned on account of generation of waste/scrap at the job worker's end, the Member (J) observed that the CBEC had in Circular B-4/7/2000-TRU dated 03.04.2000 clarified that CENVAT credit would be admissible on the part of input that is contained in any waste, refuse or by-product and in view of the Tribunal decisions in Mahindra Hinoday Industries Ltd. 2014-TIOL-2450-CESTAT-MUM, Mukand Ltd. - 2015-TIOL-353-CESTAT-MUM, held that once the waste and scrap generated at the end of the job worker had been cleared on payment of duty, the appellant could not be denied CENVAT credit.

Holding that the appellant had correctly taken CENVAT credit, the impugned order was set aside and the appeal was allowed with consequential relief.

The Member (Technical) had a differing view on the point of CENVAT credit taken on inputs sent to the job worker but received back as rejected/spoiled.

Agreeing with the findings of the adjudicating authority on this count, the Member (Technical) upheld the confirmation of demand of Rs.6,00,613/-, interest thereon and equivalent penalty.

The matter was, therefore, referred to the third Member.

The Member (Technical) referred to paragraph 3.7 in Chapter 5 (CENVAT Credit) of the CBEC Supplementary Manual which reads -

3.7 CENVAT credit is also admissible in respect of the amount of inputs contained in any of the waste, refuse or bye product. Similarly, CENVAT is not to be denied if the inputs are used in any intermediate of the final product even if such intermediate is exempt from payment of duty. The basic idea is that CENVAT credit is admissible so long as the inputs are used in or in relation to the manufacture of final products, and whether directly or indirectly .

And observed -

"27. …, I find that there is no dispute that input were issued for manufacture and during manufacture they were either rejected or spoilt and then returned back to the manufacturer by the job worker. Therefore, I am satisfied that the requirement of para 3.7 of Supplementary Instructions are satisfied in respect of subject inputs and therefore I hold that there is no need for reversal of Cenvat credit of Rs.6,00,613/- in the facts and circumstances of the present case."

The third Member(T) on reference agreed with the opinion of Member (J).

Accordingly, in view of the Majority decision, the impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-1492-CESTAT-CHD )


POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
Shri N K Singh, recipient of TIOL FISCAL HERITAGE AWARD 2023, delivering his acceptance speech at Fiscal Awards event held on April 6, 2024 at Taj Mahal Hotel, New Delhi.

TOP NEWS

AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST