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M/s DIC India Ltd. Versus Commissioner of Central Excise, Mumbai-II

2016 (6) TMI 233 - CESTAT MUMBAI

Reversal of CENVAT credit - denial on the ground that the said credit has been taken without receiving the goods from the parties who had issued the respective subsidiary gate passes - Held that:- There is no clear cut attempt to correlate the purchase made by the appellant with the subsidiary gate passes received by them. The Commissioner (Appeals) has observed that there is no correlation in documents to link the goods received by the appellant with the sales made by the importer/manufacturer. .....

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No. E/471/11 - A/87070/16/SMB - Dated:- 13-4-2016 - SHRI RAJU, MEMBER (TECHNICAL) For the Petitioner : Ms. Mansi Patil, Advocate For the Respondent : Shri N.N. Prabhudesai, Supdt. (AR) ORDER PER: RAJU The appellant, M/s DIC India Ltd. availed CENVAT Credit during February, 93 to March, 94 on the strength of subsidiary gate pass issued by Supdt. of Central Excise. A show-cause notice was issued to the appellant seeking reversal of credit on the ground that the said credit has been taken without r .....

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e record that the appellants stand throughout has been that they purchased from other dealers to whom the consignors had initially sold the goods and this is the reason why their names (appellants) are found on the relevant documents. In the reply to the show-cause notice, they have explained that subsidiary gate passes were necessary only when goods covered by single gate pass are supplied and sent to more than one customer; however, when the entire quantity covered by the gate pass was purchas .....

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, that Rashmi Trading Co. sold 380 kgs. of goods to Shree Raj Chemicals under invoice dated 11.10.1993, which was in turn sold to V.S. Chemicals under invoice dated 12.10.1993 and then to the appellants. The explanation regarding subsidiary gate pass issued by M/s Kantilal Manilal & Co. is that 100 kgs. was sold to V.S. Chemicals under invoice dated 13.7.1993 and was in turn purchased by the appellants. Similar explanation regarding 169 kgs. covered by subsidiary gate pass of Kantilal Manila .....

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ave been considered by the authorities below. The department was required to verify the correctness of the above submissions and only if it was found on investigation that the explanation was not correct (that the goods covered by the subsidiary gate passes were ultimately purchased by the appellants), could the credit be disallowed. I, therefore, set aside the impugned order and remand the case to the adjudicating authority to verify the claim of the appellants regarding purchase of the entire .....

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is concerned, the penalty however was set aside. The Commissioner (Appeals) gave following grounds for dismissal of appeal: - (i) The name of party in the subsidiary gate passes and the name of supplier who had supplied the raw materials to the appellant did not tally. (ii) The parties who had issued the subsidiary gate passes, in their statement, have denied sale of any goods to the appellant and that there is no transaction with the appellant as shown in the subsidiary gate passes. (iii) The a .....

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ey had not bought the goods directly from the importer/manufacturer but from the dealers who had in turn purchased the same from the importers/manufacturers. It was argued that in these circumstances, it is not possible for mentioning the name of the party in the subsidiary gate passes to match with the name of the supplier of the raw materials to the appellant. The subsidiary gate pass was obtained from the manufacturer/importer and not by the dealers and therefore the question of name of the s .....

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e of such goods to Arihant Chemicals from whom they had purchased the materials. She claimed that they have given such certificate and correlation in most of the cases. 3.1 Learned Counsel also raised the issue of limitation as the notice was issued in 1998 in respect of credits taken in 1993-94 and there was no suppression as they had submitted Annexure-A to the subsidiary certificates were issued by the Supdt. of Central Excise. 4. Learned AR relies on the impugned order. He argued that the ap .....

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