TMI Blog2018 (1) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturing capacity to the manufacture copper nickel alloys ingots and nickel plates. Further investigation revealed that M/s. National Udyog is a first stage dealer who obtained the invoices from M/s. AIP Industries copper nickel alloys ingots and M/s. Jay Shree Enterprises, Hisar a first stage dealer, obtained invoices from M/s. AIP Industries for nickel plates. M/s. Jay Shree Enterprises supplied nickel plates to the M/s. Ridhi Sidhi Alloys Pvt. Ltd. who further manufactured goods and supplied to the M/s. JSL on payment of duty. As M/s. API Industries is not having manufacturing capacity to manufacture the goods in question, therefore, the show cause notices were issued to the appellants on the ground that as M/s. API Industries is not having manufacturing facility of the impugned goods, therefore M/s. National Udyog and M/s. Ridhi Sidhi Alloys Pvt. Ltd. have not received the goods against the duty paying document issued by the M/s. API Industries, consequently, the goods received by the appellants have not suffered the duty, therefore M/s. JSL is not entitle to avail Cenvat Credit on the goods supplied by M/s. National Udyog or M/s. Ridhi Sidhi Alloys Pvt. Ltd. On the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries has manufacturer of the said goods, therefore, M/s. JSL is not entitle to take the Cenvat Credit on those goods. He further submitted that the proceedings against the M/s. AIP Industries were initiated and order was passed against M/s. AIP Industries to deny the Cenvat Credit to them on input used in manufacture of their final product and the said order has attained finality by this Tribunal vide Final Order No.57281 dt. 12.08.2013 which has been affirmed by the Hon ble High Court of Punjab Haryana vide order dt. 10.12.2014, therefore, the impugned order is required to be upheld and the appeals filed by the appellants are to be dismissed. 6. Heard both the sides and considering the submissions. 7. We find that in this case facts on receipt of the goods by M/s. JSL against duty paying documents by M/s. National Udyog and M/s. Ridhi Sidhi Alloys Pvt. Ltd. are not dispute. It is also not in dispute that the appellants have not made the payment of those goods. In fact M/s. JSL payment of these goods through account payee cheques. It is also facts on record that on verification by the authorities, it was found that M/s. JSL have in fact received the goods supplied by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te their claim that they have received the goods from appellant No. 2. All these were verifiable facts. The department has not conducted any investigation whatsoever on the factual statements made by the appellant No. they have not been commented upon in the Order-in-Original neither there is any rebuttal. Therefore, the existences of these documents and the transaction conducted under them have to be accepted Thus, it cannot be said that the appellant No.1 did not received any goods from appellant No. 2. Further, the show cause notice has alleged fraud and invoked extended period for demand In the entire proceedings no evidence whatsoever has been brought on record about the fact that appellant nos.1 and appellant nos. 2 have ever connived and that either of them had any knowledge about the alleged fact that M/s. AIP Industries did not have any manufacturing facilities of nickel plates, the goods which are subject matter of the proceedings. Therefore, extended period in this case not justified. The period involved in this case is August 2006 to October 2006 whereas the show cause notice has been issued on 07.09.2011, the entire demand being beyond a period of one year is therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat credit of duty. 7. I find Revenue is not disputing the fact that M/s. M.K. Steels raised dealers invoice, giving all the particulars required to be given under law in the invoice supplied to the also not being disputed that the respondent received inputs and entered the same in their records. The said inputs were further used by them in the manufacture of their final product, which were cleared by them on payment of duty. It is also a part of the record that the goods travelled from the dealer premises to the respondents premises under the cover of form 31 of UP Trade Tax department This fact is sufficient to prove the physical entries of the inputs in the assesses premises. Further, the ledger account and RG 23A records maintained by the assessee also proves the receipt of the goods. Further, the payment of the said inputs stand made by the recipient through cheque. 8. In terms of the provisions of Rule 7(4) of Cenvat Credit Rules, 2002 and Rule 9(5) of Cenvat Credit Rules, 2004, a manufacturer is required to check the particulars as mentioned in the invoice issued by the first stage dealer and he should be familiar with him. As rightly observed by Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e items, unless factually it is established to the contrary, it will be presumed that when payments have been made in respect of those inputs on the basis of invoices, the buyer is entitled to assume that the excise duty has been/will be paid by the supplier on the excisable inputs. The buyer will be therefore entitled to claim Modvat credit on the said assumption, It would be most unreasonable and unrealistic to expect the buyer of such inputs to go and verify the accounts of the supplier or to find out from the department of Central Excise whether actually duty has been paid on the inputs by the supplier. No business can be carried out like this, and the law does not expect the impossible. As the Hon'ble High Court has held that the assessee is required to take reasonable steps to ensure that the input in respect of which Cenvat Credit is taken the same are duty paid or not? In this case also, we find that the goods which have been received by M/s. JSL are against the duty paying documents issued by M/s. National Udyog and M/s. Ridhi Sidhi Alloys Pvt. Ltd. As M/s. JSL is bona-fide purchaser of the goods against the price of the said goods along with duty, in that circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and from the transporter company were done for invoices/GRs for the supplies purportedly received from M/s. AIP Industries by M/s. National Udyog only. 16. I find that significant part of evidence is separate in the case of M/s. National Udyog Limited and considering the same, I differ with the order of the Ld. Member (J) in relation to Cenvat credit availed in respect of invoices issued by M/s. National Udyog. My findings in relation to the goods purportedly received from M/s. National Udyog Limited are as below:- 17. As has been observed by the Ld. Commissioner in his order the evidence in relation to the M/s. National Udyog Limited is brought out in the para 38,39 and 40, which are reproduced below: 38. In the light of the facts contained in the said order dated 0211.2010 that M/s. AIP Industries, Ludhiana did not at all have the facility to manufacture above goods except enamelled copper wire, the department took follow up action with the help of Deputy Commissioner, Central Excise, Ropar for conducting the enquiry with Balongi Sales Tax Barrier Office against the supply of goods received by M/s. National Udyog, Hissar from M/s. AIP Industries, Ludhiana. The documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .32-33//dh/2010 dated 02.11.2010 that M/s., AIP Industries did not have the facility to manufacture copper ingots, Cupro Alloy Ingots, Nickel, Cupro Nickel, Pipes and Tubes, Aluminium Ingots, Brass Ingots, and I have no hesitation to subscribe to it in the facts and circumstances of the case. 18. The above evidence shows that M/s. AIP Industries, Ludhiana did not have the facility to manufacture copper nickel alloys ingots. Further verification of invoice No., GR No., date, truck no. as well as transport operator, details of which were obtained from M/s. National Udyog themselves, showed that there was no record of the vehicles passing through ETO, ICC, Balongi Post on the dates of GRs. The verification done from the transport operator M/s. Amirtsar Ludhiana Transport Co. has also revealed that they never sent any consignment to Hissar and categorically stated that the GRs in their name were fake and bogus. Following extract of the statement dt.21.9.2011 of Sh. Malkit Singh, Partner of M/s. Amirtsar Ludhiana Transporter Co. is very relevant: M/s. The Amritsar Ludhiana Transport Co., Ludhiana had two partners and they started and they started work of transportation of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts were entered in the RG23A Parr-1 does not establish that the goods were received in the factory. In this regard, I rely on the judgment of this Tribunal in the case of Viraj Alloys Limited Vs. CCE, Thane-II - 2004 (177) ELT 892 (Tri.Mum.) wherein the Tribunal had relied on the evidence of RTO and the truck owners to take similar view: 11. ln the present case the show cause notice is issued by ADG of DGCEI. He is competent to issue such a notice. The Id. Advocate's contention that if the authorities allege that the inputs were not received in the factory it is also obligatory on them to establish as to what happened to the duty paid inputs purchased and how the appellant could have produced the final products without the inputs is not tenable. In our opinion the above issues are extraneous and therefore the department is not required to deal with them. It is enough if the fact of non-receipt is established to deny Modvat credit under Rule 57G. The Id. Advocate relied on the case of Indian Polypipes Ors. v. CCE, Kol.I [2003 (157) E.L.T. 652 (T) 2003 (89) ECC 249 (Tri.)]. We have perused this decision the facts. In that case are completely different from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cited supra wherein the Tribunal held that it is not necessary for the department to establish a fact with mathematical precision once a presumption as to the existence of a fact is raised against an assessee. This test is satisfied in the present case. 20. I also find that the above evidence has not been challenged by the appellant at any stage. Their only contention is that they had received the goods from M/s. National Udyog Limited and the payments were made through banking channels. As brought out above, GR forms and transport documents were clearly bogus as the trucks bearing those numbers never went to Hissar and as per ETO, ICC, Balongi Post, they never crossed commercial check post. 21. The appellant have also relied upon the case of CCE Vs. Juhi Alloys Ltd. - 2013 (296) ELT 533 (Tri.-DeI.). In the said case, there was evidence that the goods travelled from dealer's premises to the respondent premises under cover of Form 31 of UP Trade Tax Department. On the contrary in the present case, there is verification report from ETO, ICC, Balongi Post (Mohali), Punjab Sales Barrier that the said goods on the date of GR and near about the date did not pass through E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are not imposable on them under Rule 26 prior to the amendment in Rule 26, which came into effect on 1.3.2007, as has been held by Hon'ble Punjab and Haryana High Court in Mini Steel Traders-2014 (319) ELT 404 (P H). From Annexure to the show cause notice dt.4.10.2011, it is seen that there are 16 invoices for the period after 1.3.2007. For the Cenvat credit taken on these invoices, the provisions of Rule 26 (2) are applicable and M/s. National Udyog, Shri Ram Kishan Gupta and Shri Jagdish Jindal are liable to be penalized for their role in facilitating M/s. JSL Stainless in fraudulent availment of Cenvat credit. Accordingly, for the period after 1.3.2007, penalty of ₹ 50 lakh is imposed on M/s. National Udyog, penalty of ₹ 10 lakh on Shri Ram Kishan Gupta and penalty or ₹ 3 lakh on Shri Jagdish Jindal under Rule 26 (2) of Cenvat Credit Rules, 2002. 25. The appeals are disposed of in above terms. (Devender Singh) Member (Technical) DIFFERENCE OF OPINION As there is divergent views of the Members of this Tribunal, therefore the matter may be placed before the Hon'ble President to appoint third Member to resolve the following i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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