TMI Blog2015 (9) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... availed on the basis of invoices as mentioned in the Annexure I to the Show Cause Notice, other than vehicle numbers mentioned Auto Rickshaws, are set aside - Matter remanded back - Decided partly in favour of assessee. - Appeal No. E/176-177/2011-DB - Order No. A /11338-11339/2015 - Dated:- 23-9-2015 - Mr. P.K. Das, Member (Judicial) and Mr. P.M. Saleem, Member (Technical), JJ. For the Petitioner : Shri V.M. Doiphode, Advocate For the Respondent: Shri Alok Srivastava, Authorised Representative ORDER Per: P.K. Das The relevant facts of the case, in brief, are that M/s Bhakti Alloys Pvt.Ltd. (the Appellant Company) were engaged in the manufacture of S.S. Flats, classifiable under Chapter 72 of the Central Excise Tariff Act, 1985. They were availing CENVAT Credit on the raw materials viz. Ferro Alloys, S.S. Scrap etc amongst others, under CENVAT Credit Rules, 2004. The Central Excise officers received information that two Bhavnagar based registered dealers viz. M/s Good Luck Empire and M/s Jenil Empire were engaged in trading of M.S./S.S./Aluminum Scrap and S.S. Flats, and fraudulently, passed CENVAT Credit to different buyers including the Appellant Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly stated that they have reversed the amount on the basis of RTO report and they would contest the matter. It is submitted that they have availed the credit on the basis of the invoices issued by the dealers accompanied with the materials, duly received in their factory. It is revealed from the CENVAT account that the materials were used in the manufacture of final product, cleared on payment of duty. The Appellant paid the amount to the suppliers through cheques only and duly recorded in the ledger. The learned Advocate drew the attention of the Bench to the relevant portions of the various statements. The reasons for outstanding amount to the supplier were due to financial crisis and the Appellant Company ultimately paid the entire amount to the supplier. It is submitted that as evident from the ST-3 returns for 2006-07 and 2007-08 and the ledger copies that they paid the Service Tax on freight as recipient of services under the Rules. It is also submitted that there is no dispute about the existence of the supplier and genuineness of the invoices issued by them and therefore, there is no reason to deny the CENVAT Credit. The learned Advocate submitted the written submissions alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstalled in their factory for manufacturing of the finished goods. It is categorically stated that the raw material, i.e. S.S.Scrap, Aluminum Scrap etc were received in their factory and fed into the furnace for melting at high temperature. In statement dt.16.04.2008, the Appellant No.2 was shown the various rules of CENVAT Credit Rules, 2004 and after going through the worksheets prepared by the Central Excise officers on the basis of records for denial of CENVAT Credit, the Appellant accepted that they have wrongly availed CENVAT Credit of ₹ 1,90,908. It was stated that they have taken excess CENVAT Credit than actually admissible credit; in some cases, without duty paying documents, and also credit taken on Furnace oil, which is not an input, as they were using electric furnace in their factory for manufacturing of their final product. It was also stated that they have availed credit of ₹ 1,90,908.00 due to lack of knowledge. In statement dt.26.05.2008, the Appellant No.2 was shown RTO Report and the Worksheet-II prepared by the Central Excise Officers showing the details of invoices, in which the vehicle numbers mentioned as Auto Rickshaws were not capable of carryi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exure I(i). As per Annexure I(iii) of the show cause notice, CENVAT Credit of ₹ 15,21,683.00 was denied, on the basis of RTO report in respect of invoices issued by other dealers/manufacturers. The Appellant No.2 in his statements in respect of invoices issued by 18 dealers/manufacturers as mentioned in Annexure I (iii) of Notice, stated that they received the goods without Lorry Receipts and duly recorded in Raw Material Stock Register in RG 23 A Part I. It is seen from the Adjudication order that a detailed verification was conducted against the invoices issued by the 18 dealers/manufacturers. In all these cases, the concerned jurisdictional Central Excise officers reported that the said suppliers were in existence or existed at the material time and the invoices issued by them were genuine. It also appears from the ledger account in respect of the said dealers for the respective period, submitted by the Appellant that no substantial payment is outstanding. It is evident from the records that on enquiry, the invoices mentioned in Annexure I(iii) are genuine. But, no investigation was conducted on the invoices at the end of the input supplier, as referred in Annexure I(i). O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the suppliers are genuine and the appellant paid the amount to the supplier as evident from the ledger and CENVAT Account. In respect of the overloaded vehicles as mentioned in Annexure A 1(i) of the Notice, no investigation was done at the suppliers end. The Appellant placed the evidence of Raw Material Stock Register in RG23A Part I, showing receipt and utilization of inputs in the manufacture of final product. But, no further investigation was done to the supplier, vehicle owner/drivers etc. So, merely the goods were overloaded in vehicles would not prove non-receipt of goods, unless it is established by other evidences. At least, an enquiry should be made to vehicle owners/suppliers, which was not done in this case. We do not find force in the submissions of the learned Authorised Representative on this issue. 9. It is revealed from the Annexure I(ii) of the show cause notice that CENVAT Credit of ₹ 41,81,587.00 was denied on the basis of invoices issued by the said two Bhavnagar based dealers viz. M/s Good Luck Empire and M/s Jenil Empire. The Adjudicating authority observed that the Appellant failed to produce the lorry receipts (LRs). The Appellant No.2 in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis that the Appellant manufactured the final product on the basis of the raw material purchased from the open market. But, there is no iota of evidence that the Appellant procured the raw materials from the open market. It is significant to note that during stock verification of inputs and finished goods, no discrepancy was found. On the contrary, the Appellant No.2 in his various statements had categorically stated that they received the inputs since 2004-05 without any lorry receipts. It is also stated that the payments were made to the suppliers through cheques. The learned Advocate, during the course of hearing, submitted that copies of ST-3 returns for the year 2006-07 and 2007-08 and that they have paid the freight charges. The findings of the Adjudicating authority are merely on the basis of assumption and presumption, without any material. So, we do not find any reason to deny the amount of CENVAT credit as mentioned in Annexure I(ii) of show cause notice. 11. In the case of M/s Banian and Berry Bearings Pvt. Ltd. Vs Commissioner of Customs, Ahmedabad, the Tribunal, vide Final Order No. A/171 to 181/WZB/AHD/2008, dt.06.02.2008, observed that no reliable evidence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to conclude non-receipt of the goods. 14. In the case of Sri Suguna Machine Works, Unit-II Vs CCE Coimbatore - 2014 (306) ELT 500 (Tri-Che.), the Tribunal held that the Revenue disputed the value of goods, which cannot be the reason for denial of CENVAT Credit. It has been observed as under:- 6. It appears that the appellant issued the purchase order for purchasing the CI scrap. They received the CI scrap accompanied with invoices indicated as CI scrap. Rule 9(3) of the Cenvat Credit Rules as it stood at the material period provides that the manufacturer of excisable goods taking Cenvat credit on inputs shall take reasonable steps to ensure that the input or capital goods in respect of which he has taken the Cenvat credit on which the appropriate duty of excise as indicated in the documents accompanying the goods has been paid. The Explanation to Rule 9(3) of the said Rules provides that the manufacturer shall be deemed to have been taken reasonable steps if he satisfies himself about the identity and address of the manufacturer or supplier as the goods may be showing the documents evidencing payment of excise duty either from his personal knowledge or on the basis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of inputs under the cover of the same cannot be upheld. Further, we find that the Tribunal in the case of CCE, Chandigarh v. Shakti Roll Cold Strips Pvt. Ltd. [2007 (80) RLT 267 (CESTAT-Del.), by taking note of the earlier decisions of the Tribunal, has held that the credit cannot be denied only on the ground that vehicle numbers given in the invoices were not of the trucks, when payment for goods was made by cheque/draft and inputs were used in the manufacture of final product which were cleared on payment of duty, RT-12 returns were assessed and there was no evidence of use of alternative inputs. Accordingly, Tribunal rejected the appeal filed by the Revenue. The matter was taken up by the Revenue before the Hon ble High Court of Punjab Haryana, who vide their judgment as reported in 2008 (229) E.L.T. 661 (P H) = 2008 (87) RLT 793 (P H) rejected the same. Similarly in the case of M/s. Steel Tubes of India Ltd. v. CCE, Indore [2008 (87) RLT 630 (CESTAT-Del.)], it was held that merely because vehicle numbers mentioned in some of the invoices are not of transport vehicles, the same is not sufficient to deny the credit when there is evidence of receipt and utilization of inp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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