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M/s. STI Industries Versus Commissioner of Central Excise & S.T., Vapi

2015 (7) TMI 224 - CESTAT AHMEDABAD

Denial of CENVAT Credit - Bogus invoices - Invoices issued without actual receipt of goods - Held that:- On perusal of the Compilation of documents, showing correlation of the goods received from M/s. Annapurna and return of semi-finished goods, I find that the appellant had produced copy of invoices of M/s. Annapurna along with transport documents and Bills of labour charges paid to the job workers - The job worker issued Bills for labour charges alongwith delivery challans issued from time to .....

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of Labour Bills and other details, which were not disputed by the lower authorities.

Cenvat credit cannot be denied on the ground of non-receipt of inputs when the Tribunal found that department is not able to prove that any alternative raw material was received and used in the final products. The Tribunal has also noted that the findings of the Commissioner established that RT-12 returns have been assessed finally by the Range Officer which contains all the documents including the i .....

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in existence during the material period as established by their invoices and the Central Excise monthly returns. So, the appellant has discharged their responsibility and therefore, CENVAT credit availed on the basis of invoices of M/s. Annapurna cannot be denied. - Decided in favour of assessee. - Appeal No. E/1243/2011 - Order No. A/10956/2015 - Dated:- 2-7-2015 - Mr. P.K. Das, Hon ble Member (Judicial),J. For the Appellant : Shri Alok Barthwal, Advocate For the Respondent : Shri Jitendra Nai .....

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01.2007. During investigation, it was found that the appellant availed CENVAT credit amounting to ₹ 11,59,698/- on the basis of invoices issued by M/s. Annapurna Impex Pvt. Limited, Ludhiana ( M/s. Annapurna in short) without receiving the inputs. The Central Excise officers recorded the statements of the employee of the appellants, broker of M/s. Annapurna and Angadias of Ludhiana. 2. A show cause notice dated 31.03.2008 was issued proposing demand of duty of ₹ 11,59,698/- alongwith .....

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during investigation. By the impugned order, Commissioner (Appeals) upheld the adjudication order and rejected the appeal filed by the appellant. 3. The learned Advocate on behalf of the appellant submits that the appellant purchased the materials from M/s. Annapurna and directly sent to the Job Workers. After processing of the raw materials, received from the input suppliers, the Job Workers delivered the processed materials to the appellant alongwith Challans and Bills of labour charges, which .....

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iana, in reply to their application under Right to Information Act, 2005 that M/s. Annapurna was in existence during the material period and they issued invoices and also paid duty. Learned Advocate filed compilation of the Documents showing correlation of the goods received from M/s. Annapurna to return of semi-processed goods with copy of the invoices Challans, Bills, etc. which were also placed before the Adjudicating authority. He relied upon the following decisions of the Tribunal:- (a) Sup .....

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er of M/s. Annapurna from the adjudication order that the appellant availed cenvat credit on the basis of the invoices without actual receipt of the goods. He submits that the investigation was conducted on various points namely, broker, Agandias, Bank Accounts of M/s. Annapurna etc. and they admitted supply of the invoices without supply of goods to the appellants and paid cash money. He relied upon the decision of the Tribunal in the case of Mahesh C. Kadakia vs. CCE, Nasik 2007 (217) ELT 223 .....

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rs were used to receive the raw material directly by contacting the manufacturer/ suppliers. The raw material namely Copper Wire Bars, Copper Ingots were received by the job workers directly from the manufacturer/ suppliers and the job workers were processing the material and then returned the copper tubes to the appellant. The appellants were carrying out the manufacturing process on the semi finished goods, which were either exported or cleared in the domestic market on payment of duty, in com .....

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ealed that M/s. Annapurna was not having any plant or machinery to manufacture the copper bars/ ingots and no record relating to production and clearances of the goods, were available at the factory; that they had fraudulently availed cenvat credit, without receipt of raw materials and they do not manufacture any goods that they prepared only invoices in the names of the customers. It has relied upon the statement of Shri Asok Bandmal Bafna, the broker of M/s. Annapurna. The learned Advocate pla .....

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ppeals) that M/s. Annapurna was not in existence during the material period, cannot be accepted. 7. The Commissioner (Appeals) heavily relied upon the statement of the broker of M/s. Annapurna. There is no reference in the statement of the broker, with whom he has dealt with the appellant Company. The statement of the broker is not corroborated with any evidence. The statement of Agandias would also not corroborated with evidence in respect of invoices in question. In any event, it is seen from .....

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e appellant Company in his statement stated that they never contacted any person of M/s. Annapurna, Ludhiana for purchase of raw materials from M/s. Annapurna. They had placed an order on M/s. Star Metal & Tubes Corporation, Powai and as they could not get their material on time, they suggested the appellant about M/s. Annapurna. It was told by Shri Dhrunal C. Patel who is the Karta of HUF of M/s. Star Metal & Tubes Corporation, Powai that he could arrange from M/s. Annapurna. They have .....

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eived from M/s. Annapurna and return of semi-finished goods, I find that the appellant had produced copy of invoices of M/s. Annapurna along with transport documents and Bills of labour charges paid to the job workers. For example, the appellant availed credit on Copper Wire Bars to the quantity of 10963Kgs, vide Central Excise Invoice No. 415 dated 05.11.2003 of M/s. Annapurna, transported by New Satkar Tempo Transport Union vide Bilty No. 239 dated 05.11.2003 which was delivered to the job wor .....

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receipt of the goods was on the basis of statements of various persons. The appellant refuted the charges particularly by showing various evidences of receipt of goods, Lorry Receipt, Purity Check report, Payment of Labour Bills and other details, which were not disputed by the lower authorities. The Tribunal in the case of Super Trading Company vs. CCE, Delhi (supra), held as under:- 9. After hearing learned DR, I find that the entire case of the revenue is based upon investigation conducted at .....

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ly of goods so as to reflect some sale purchase books on account. Though as per the said statement the arrangement was entered into in the year 2002, I find that the disputed period in the present appeal is February, and March, 2004. In any case I find that has procured the inputs from the second stage dealer M/s. Super Trading Company said who in his statement has agreed to have supplied the goods to the manufacturing unit. Inasmuch as Rule 7(2) of Cenvat Credit Rules requires the recipient of .....

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any evidence on record to show that such inputs were procured from some other alternative source. Admittedly, the said appellant could not have manufactured final product, without the receipt of the inputs, in which case revenue findings that no inputs were actually received cannot be upheld. Recipient of the inputs is expected to know his immediately supplier and there is no further requirement to find out as to from where his supplier has procured the inputs. Accordingly, I set aside the conf .....

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No. 8/2007-C.E., (N.T.) dated 1-3-2007. Inasmuch as the period for the present case is prior to the said date, I set aside the penalty imposed upon M/s. Ayushi Steels Company Pvt. Limited also. 9. The Hon ble Punjab & Haryana High Court in the case of CCE, Chandigarh vs. Shakti Roll Cold Strips Pvt. Limited (supra) observed that cenvat credit cannot be denied on the ground of non-receipt of inputs when the Tribunal found that department is not able to prove that any alternative raw material .....

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