The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the cenvat credit is allowable to wastage arising during manufacture or job work process under the Cenvat Credit Rules, 2004.
The appellant contended that it is settled law that Cenvat reversal cannot be demanded under Rule 4(5)(a) of Cenvat Credit Rules, 2004 on the process loss or wastage arising during the job work process since it is practically impossible to receive back the exact same quantity of inputs.
Allowing the above plea of the appellants, Judicial Member Mr. Ramesh Nair observed that even if it is assumed that the subsequently received material after 180 days is part of the processed goods even then only due to delay in receipt Cenvat credit cannot be denied as the appellant was entitled for Cenvat credit as and when the input / processed goods received after 180 days therefore on both the count the cenvat credit could not have been denied or demanded by the Revenue.
“There is a short receipt of 2% material. I find that since the appellant has sent their chemicals in the water base during the process it is obvious that a certain quantity of the contaminated water shall be wasted therefore, the same is not capable of being returned by the job worker. Irrespective of the factwhether the same is liable to be returned or not there is no dispute that the non receipt of material is wastage and nothing else. It is settled that any wastage arising during the course of manufacture cenvat credit attributed to said wastage cannot be denied,” the Tribunal noted.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
