2015 (7) TMI 1173 - AT - Central Excise

CENVAT credit - forged invoices - Held that - I find that upon proper analysis of the documents submitted by the Respondent since the Ld. Commissioner (Appeals) has arrived at the conclusion that the appellant (respondent herein) had in fact received the goods covered under the disputed invoices maintainability of the impugned order cannot be questioned at this juncture especially in view of the fact that the Revenue has not brought on any tangible evidence to prove non-receipt of the goods by the respondent. Further I find that in an identical set of facts involving the same supplier M/s M K Steel (P) Ltd. the Hon ble Allahabad High Court in the case of M/s Juhi Alloys 2014 (1) TMI 1475 - ALLAHABAD HIGH COURT have dismissed the appeal filed by the Department holding that once the goods have been received by the recipient under the cover of duty paid documents for use in the intended purpose the genuineness of the said documents cannot be questioned by the Department. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against order allowing Cenvat credit based on disputed invoices.

Analysis:
The case involved appeals against an order passed by the Commissioner (Appeals) setting aside an adjudication order and allowing the appeals in favor of the respondent. The matter revolved around the issuance of fake invoices by a fraudulent dealer, facilitating illegal Cenvat credit by manufacturers. The jurisdictional Central Excise Authorities at Lucknow initiated proceedings against the respondent for allegedly taking wrong Cenvat credit based on fraudulent invoices. The Revenue contended that the respondent did not take reasonable steps to ensure duty payment on goods received, and lacked evidence of goods receipt in the factory. However, the respondent argued, supported by documents like Form 31, ledger accounts, and payment evidence, that the goods were received, and cited a judgment from Allahabad High Court.

Upon analysis, the Tribunal found that the Commissioner (Appeals) concluded the appellant had received the goods covered under the disputed invoices, supported by documents submitted by the respondent. Notably, the Tribunal highlighted a judgment from Allahabad High Court in a similar case involving the same supplier, emphasizing that once goods are received under duty paid documents for intended use, the genuineness of documents cannot be questioned by the Department. The Tribunal referenced the judgment's content regarding the buyer's entitlement to assume duty payment by the supplier when claiming credit, emphasizing the impracticality of expecting buyers to verify supplier accounts or Central Excise duty payments. Consequently, the Tribunal upheld the impugned order passed by the Commissioner (Appeals) and dismissed the appeals filed by the Revenue.

In conclusion, the Tribunal's decision was based on the findings that the respondent had received the goods covered by disputed invoices, and the Department failed to provide tangible evidence to prove non-receipt. The judgment emphasized the buyer's entitlement to claim credit based on the assumption of duty payment by the supplier, highlighting the practicality and reasonableness of such practices in business transactions.