2019 (1) TMI 821 – GUJARAT HIGH COURT – 2018 (362) E.L.T. 972 (Guj.) – Wrongful availment of CENVAT Credit – input – Linear Alkyl Benzene (LAB) – It was alleged that LAB was not at all utilized as input in the final product, and therefore, the assessee wrongly availed the Cenvat credit of duty paid on such input i.e. LAB – Held that:- It is required to be noted that as such the matter was remanded to the learned Commissioner (Appeals) for the very purpose by specifically observing that the onus is on the Department to prove that the assessee wrongly availed the Cenvat Credit on the tax paid on LAB, which was used in the input of the final product, and therefore, unless and until the Department was able to prove that in the final product the LAB was not used/utilized at all, the Department was not justified in holding that the assessee wrongly availed the Cenvat Credit on LAB.
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So far as some of the statement is concerned, which are relied upon by the original adjudicating author
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ot at all utilized as input in the final product, and therefore, the assessee wrongly availed the Cenvat credit of duty paid on such input i.e. LAB. Vide order dated 22-1-2007, the Learned Commissioner (Appeals) by a detailed speaking order remanded the matter to the adjudicating authority with a liberty to the Department to prove whether in fact LAB was used in the final product or not, and with a direction to make further investigation and to draw representative samples of their final products for chemical test and supply them copy of opinion of the Director of School of Science, Gujarat University, which earlier was relied upon by the original executing authority but the copy of which was not given/furnished to the assessee. The relevant observations by the Learned Commissioner (Appeals) while remanding the matter with the above directions are as under; I find that though the Central Excise Officers had prior intelligence that the appellants have not utilized LAB in manufacture of t
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nt of cenvat credit if there is no evidence otherwise whereas I find that the dealer Shri Jayesh M. Bhimani of M/s. Parshwa Chemicals & M/s. Bhimani Chemicals in his statement has confirmed the dispatch and its receipt and payment of LAB by M/s. Ganesh Chemicals to them; the entry of sale of LAB in their records & RG23D register and also that drivers of the transporter at Vadodara used to deliver to LAB as per their instructions to the places where they were asked to deliver; that Ravindra M. Shah of Shah Bulk Carrier, Vadodara had also confirmed that on reaching the tankers destined for M/s. Bhimani Chemicals Pvt. Ltd., Ahmedabad the drivers of the tankers were being instructed to contact the representative of their firm outside octroi limit of city at Piplej or Aslali. The representative of the said firms were directing the drivers and assigning the destination where the said LAB was to be unloaded/delivered and they were concerned with the receipt/acknowledgment of the said
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or dealer after taking Cenvat credit thereon. The case of non use of LAB by the appellants is remanded back to the original adjudicating authority with direction to make further investigation and to draw representative samples of their final products for chemical test and supply them copy of opinion of Dr. Y.K. Agarwal, Director of School of Science, Gujarat University. 3. It is an admitted position that thereafter the adjudicating authority did not obtain any chemical test by drawing samples of the final products and despite the same confirmed the demand and imposed the penalty both upon the Company as well as the Director. The matter reached up to the Learned CESTAT and by the impugned order/orders, Learned CESTAT has set aside the demand as well as the penalty, which is subject matter of the present Tax Appeals before this Court. 4. Shri Divyeshvar, Learned Advocate appearing on behalf of the Department has vehemently submitted that as such on remand the chemical samples o
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missioner (Appeals) came to a conclusion on the basis of the same. However, so far as some of the statement is concerned, which are relied upon by the original adjudicating authority while passing the impugned order, the Learned Commissioner (Appeals) specifically observed that they are restricted statement, and therefore, the same could not have been relied upon. Be that as it may when the Department has failed to prove that the final product did not contain the LAB, which was alleged to have been used by the assessee as input on which the tax was paid, it cannot be said that the adjudicating authority was justified in denying the Cenvat Credit on the ground that the said LAB was not used/utilized as input in final product. No error has been committed by the Learned Tribunal. We are in complete agreement with the view taken by the learned Tribunal. No substantial question of law arises. Hence, present Appeals deserve to be dismissed and are accordingly dismissed. – Case laws – Decis
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