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2013 (1) TMI 412 - AT - Central ExciseCenvat credit of duty paid on the inputs - said inputs were received from two registered dealers who inturn received the inputs from M/s Haryana Steel & Alloys Ltd(HSAL) - investigations conducted at HSAL - issuance of invoices without actual supply of the goods as per statement of Executive Director of HSAL - Held that:- The said statement of Executive Director of HSAL does not stand agreed upon by the two dealers who have clearly deposed that they were receiving the goods from HSAL along with the invoices. It is not the Revenue's case that HSAL was not manufacturing the raw material or were clearing/diverting their final product to other persons. It is also seen that all the payments were made to the dealers by cheque and there is no allegation much less any proof of flow back of the money from dealers to the appellant. Revenue has also not made any enquiries from the transporters as regards the transportation of the goods in question. As such the denial of Cenvat credit on the sole statement of manufacturer of the inputs, without taking into consideration the statement of the first stage dealer as also the statement of the manufacturing unit is not justified. It is further seen that manufacturing unit has entered all the inputs in their records which stands shown to have been used in the manufacture of their final product and cleared on payment of duty. If the Revenue's case as regards non-receipt of inputs is accepted, a vacuum remains to be answered as to how the final product stands manufactured by M/s J.L.Autoparts as revenue has not shown any alternate procurement of the raw material. As decided in PRACHI POLY PRODUCTS LTD. case (2005 (3) TMI 249 - CESTAT, MUMBAI) where the appellants have taken all reasonable steps to ensure that duty has been paid on inputs received by them and on which they took credit - Credit cannot disallowed on account of denial by manufacturer as regards payment of duty. Also VARANASI DOMESTIC APPLIANCES (P) LTD.case [2007 (2) TMI 484 - CESTAT, NEW DELHI]stated that manufacturer were party to fraud or misrepresentation by supplier of inputs, denial of credit not justified - no reasons to deny the credit, confirmation of demand against them along with penalty also upon the two dealers imposed is set aside.
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