2025-VIL-1878-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Clearance of samples for testing purposes, Clandestine Removal of Goods – Appellant-EOU engaged in Contract Research and Manufacturing Services, was alleged to have cleared finished products disguised as testing samples without payment of duty, resulting in clandestine removal of goods - Whether the products cleared as samples for testing purposes were actually finished products cleared without payment of duty and, therefore, were removed in a clandestine removal by the appellant – HELD - The evidence showed that the appellant had cleared only testing samples to its in-house facility and not finished products. The samples were accompanied by covering letters, testing reports, and consumption certificates, substantiating that they were for testing purposes - The appellant had produced enough evidence to substantiate that only testing samples had been sent to the in-house facility, but the Department failed to produce any evidence to contradict the appellant's claim. The inference drawn by the impugned order that the samples were finished products based on a comparison of product names was not justified, as the appellant had explained that the names were used for identification purposes. Thus, the appellant cannot be said to have engaged in clandestine removal of goods - the impugned order was set aside, and the appeal was allowed - Dept allege that the quantity of goods shown to have been cleared was higher than what was actually cleared – HELD - This finding has been arrived at on the basis of the weight of the goods recoded in the courier agencies - The statements of staff of courier agency have been completely mis-interpreted in the impugned order. Both the persons had clarified the courier billing practices and had stated that the courier charges are calculated based on fixed weight slabs and not actual weight. They specifically stated that any parcel weighing between 1 gm and 50 gms is recorded as 50 gms, and any parcel between 201 gms and 1000 gms is recorded as 1000 gms, regardless of the actual weight for billing purpose - The department did not produce any evidence to substantiate that the weight goods was lesser than the actual weight of the products shipped - Availment of Cenvat Credit beyond the stipulated period of one year provided under Rule 4 of CCR, 2004 – HELD - The credit availed on input services beyond the one-year period was due to a delay in disclosing the availment in the returns, and not in the actual availment in the books of account. The credit reclaimed after withdrawal of refund claims and the credit on the balance 50% of capital goods were also validly claimed. Therefore, the appellant had correctly availed and utilized the CENVAT credit.
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