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2023 (10) TMI 424 - CESTAT MUMBAIDenial of CENVAT Credit - procurement/import of capital goods between 2005-06 and 2007-08 - denial on the ground of lack of evidence of having been received at the designated factory of the appellant - HELD THAT:- The physical verification of imported machinery was undertaken after closure of the factory. There is no reference in the orders of the lower authorities to audit having included physical verification of these; in any case, their existence at the sister units could well have been ascertained and failure to do so is dereliction on the part of the adjudicating authority as central excise authority having jurisdiction over the factory of the appellant. Choosing to style alleged ‘non-intimation of transfer’ as sufficing to deny credit also demonstrates failure to cite the authority under which the appellant was required to intimate such transfer. Under the scheme of CENVAT Credit Rules, 2004, taking of credit is permitted on receipt of goods in factory, subject to such variations as permitted therein, and not to be denied if availed against proper documentations. Any allegation of non-receipt of such ‘capital goods’ at factory, in contradistinction with non-availability that may be justified with explanations subject to ascertainment, would, therefore, have to be based on, and also sustained on, clear evidence of diversion. There are no compelling motive for diversion of imported and locally procured goods save that two establishments set to take credit – one on document and the other on availability of ‘capital goods’ – which, in the absence of supporting evidences, defies logic as having occured. It would appear that the entire exercise was half-hearted and relying entirely on presumptions which is a characteristic that is anathema to adjudicatory proceedings. The impugned order is set aside - Appeal allowed.
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