ALU BOND ENTERPRISES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) BOTH the appeals are being disposed of by a common order as they arise out of the same set of facts and circumstances, though the impugned orders passed by the Commissioner (Appeals) are separate. As per the facts on record both the units are located in the area of Jammu & Kashmir and are availing Area Based Notification No. -C.E., dated 14 -11 -2002. The factory premises of M/s. Alu Bond Enterprises were visited by the officers, who conducted various checks and verifications and found shortage of certain raw materials. The shortage in the main raw materials aluminium coils was to the extent of 22.803 MT. The appellants explained that they have sent 21.5 MT of aluminium coils to their sister unit M/s. Alstrong Enterprises for conversion on job work basis. The shortages of the other raw materials etc. were found to be much on the lower side.

(2.) THE lower authorities by observing that the appellants did not follow the procedure as per the provisions of Rule 4(5) of Cenvat Credit Rules, 2004 for sending the cenvatable raw material to the job worker, for conversion, held that the shortage of the raw material is established and the appellant is liable to reverse the credit.

(3.) APART from above, I find that if the Revenue is directing an assessee to reverse the Cenvat credit, he will have to pay more duty on its final product, out of the PLA and would be entitled to more refund. As such the stand taken by the Revenue is in fact favouring the assessee. In any case, I find that the appellants have given suitable explanations for the removal of the aluminium coils to their sister unit, which the sister unit has accepted and was also in the process of returning the processed goods to M/s. Alu Bond Enterprises. Mere non -following of the procedure, if at all, would not result in denial of credit. The shortages in respect of the other raw materials are marginal and keeping in view that the entire exercise is revenue neutral, I find no favour that the impugned orders confirming demands against the appellants and confiscating the raw material and imposing penalty. Accordingly, the impugned orders are set aside and both the appeals allowed with consequential relief to the appellants.