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M/s ANJ Metal Recycling Pvt. Ltd. Versus Commissioner of Central Excise, Chandigarh

2016 (6) TMI 271 - CESTAT CHANDIGARH

Cenvat credit on paper transactions not physically received - Held that:- The manufacture supplier of the goods is not M/s Jai kara Steel Rolling Mills at all. No investigation has been conducted by the Revenue at the end of manufacturer supplier who has issued the invoices on which the appellant has taken Cenvat Credit. No investigation was conducted from the transporters to ascertain the fact whether goods have been transported to the appellant's factory or not. Merely on the ground that M/s J .....

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lant is able to produce the invoice against which appellant has availed cenvat credit and the same has been entered in their RG-23 Reigster therefore, the burden lies on the revenue to prove that this is only a paper transaction and the goods have not been received by the appellant at all. To ascertain this fact that appellant has not received the goods, the statement of transporter is very much relevant to find out the truth. Moreover, the investigation at the end of manufacture supplier may al .....

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arwal, Adv For the Respondent : Shri K Poddar, AR ORDER Per Ashok Jindal Appellant is in appeal against the impugned order wherein duty demand alongwith interest has been confirmed and equivalent penalty has been imposed on the allegation that appellant has taken cenvat credit on paper transactions and has not physically received the goods. 2. The facts of the case are that the investigation was conducted on one M/s Jai kara Steel Rolling Mills, Mandi Gobindgarh on 28.02.2005 and the gate keeper .....

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visited which was found locked. Thereafter, conducting more investigation a show cause notice was issued to the appellant on the basis that invoices issued by M/s Jyoti Steels are only paper transactions and no goods have been received by the appellant. As well as M/s Jyoti Steels which was adjudicated and availment of cenvat credit on the invoices issued by M/s Jyoti Steels was denied. Consequently, duty is demand alongwith interest and penalty is also imposed on the appellant. Therefore, appel .....

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mand is not sustainable. As they have received the goods in their factory under the cover of duty paid invoices which shows the manufacture and supplier of the goods and they have paid the amount against this invoices through cheque, therefore, without conducting investigation at the end of transporter and manufacture supplier or physical verification of the stock, the demand is not sustainable. To support this contention he relied on the decision of Talson Mill Final order NO. 976/2012 SMV date .....

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t. Therefore, question of receipt of goods by the appellant does not arise. He further submits that enquiries were revealed which shows that first stage dealer was not having any godown to store the goods. Moreover, he remained non co-operative with the departmental officer during the course of the investigation itself. Therefore, burden casts on the appellant to prove that they have received goods physically in their factory which they failed to do so with any tangible evidence. He also relied .....

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they are selling goods through M/s Jyoti Steels. Thereafter, investigation was conducted at the premises of M/s Jyoti Steels which was found non-existent and having no godown. In these set of facts, it is concluded against the appellant on the basis of the statement of proprietor of M/s Jyoti Steels and authorized representative of appellant that appellant has procured invoice not physically received any goods. Therefore, cenvat credit was denied. In this case, I find that the manufacture suppl .....

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ot disputed by the Revenue that during the relevant period, M/s Jyoti Steels was the registered dealer and registration was granted to M/s Jyoti Steels by Central Excise Registration Department. If a supplier of goods is the registered dealer of the department itself, the department cannot allege that dealer is non-existent unless and until registration is cancelled. 7. As per Rule 9(3) of the cenvat credit Rules 2002, which deals with the availment of cenvat credit by the assessee is reproduced .....

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mpanying the goods or relating to input service, has been paid, Explanation:- The manufacturer or producer of excisable goods or provider of output service taking cenvat credit on input or capital goods or input service or the input service distributor distributing cenvat credit on input service on the basis of, invoice, bill or, as the case may be, challan received by him for distribution of input service credit shall be deemed to have taken reasonable steps if he satisfies himself about the id .....

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ay be, the provider of input service by the Superintendent of Central Excise within whose jurisdiction such manufacturer has his factory or such supplier or provider or output service has his place of business or where the provider of input service has paid the service tax and where the identity and address of the manufacture of the supplier or the provider of input service is satisfied on the basis of a certificate, the manufacturer or producer or provider of output service taking the cenvat cr .....

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