Order Date – 13 February 2023

Parties: M/s Sahney Commutators Pvt Ltd Vs Commissioner Of Central Tax, Bengaluru South

Facts –

• The Appellant, M/s Sahney Commutators Pvt Ltd, is manufacturing Commutators and Bare Copper Strip/wire of various sizes are the major input for the manufacture final products. Some defective raw materials were return to supplier without reversing the CENVAT credit and instructed them to return on Job work basis.
• Based on an audit a show cause notice was issued alleging that the appellant had irregularly availed CENVAT credit of Rs.57,636/-.

Issue –

• Whether the appellant had correctly availed CENVAT credit?

Order –

• The Tribunal observed that though, there is a slight discrepancy in the description in invoices, it is an admitted fact that Copper of 1028.8 Kgs were supplied by suppliers, it was returned for Job work due to defect and on completion of Job work, it is sent back to the appellant for further processing vide Invoice dated 03.02.2017 by charging only the labour charges.
• During investigation there is no discrepancy pointed out regarding the stock of raw material maintained by the appellant and the return submitted for the relevant period shows proper transaction of said material as claimed by the appellant.
• The Tribunal held that there is no reason to allege that the appellant had availed ineligible CENVAT credit. Hence, the appeal is allowed with consequential relief.