C.C.E. Jaipur-I vs M/s. Dalas Biotech Ltd.

Revenue is in appeal against the impugned order dated 29.05.2006 passed by the Commissioner (Appeals-I), Customs and Central Excise, Jaipur.

The grievance of Revenue is that the respondent is required to reverse the cenvat credit in terms of Rule 4(5) of the Cenvat Credit Rules, 2004, in

respect of the non- receipted quantity of the inputs from the job worker’s premises. Further, the Revenue has also stated that based on the letter

dated 11.03.2003 of the Respondent, since the Ld. Commissioner(Appeals) has dropped the demand, the same is not proper and justified inasmuch as

the said letter was not produced by the Respondent during the course of adjudication proceedings.

We have heard the Ld. Counsel for both the sides and perused the records.

We find that the Commissioner (Appeals) has set aside the Adjudication order on the ground that Rule 4(5) of the Cenvat Credit Rules, 2002 does

not require return of the waste and scrap from the job workers premises. The Commissioner (Appeals) also took the view that non-entering of

particulars in challan or in job work register is a procedural infraction, for which the benefit of Cenvat cannot be denied. However, we find from the

available records that the letter dated 11.03.2003, wherein the Respondent had explained the generation of waste was not produced before the

Original Authority at the time of Adjudication Proceedings. The said fact is evident from the letter itself, where there is no acknowledgement by the

Department regarding receipt of such letter. Further, we find that the test report based on which the Commissioner (Appeals) has arrived at the

conclusion regarding generation of the waste was also available before the Original Authority. Thus, we are of the view that principle of natural justice

in this case has been violated inasmuch as the Commissioner (Appeals) has decided the case solely based on the documents without giving the

opportunity to the Revenue Respondent to properly put forth their case before the Commissioner (Appeals).

Therefore, in the interest of justice, we remand the matter back to the original authority for a fresh fact finding on the additional documents

submitted by the Respondent before the Commissioner (Appeals). Needless to say, the Respondent herein should be given opportunity of hearing

before disposal of the case. The appeal is disposed of in above terms.

(Dictated and pronounced in the open court)