TMI Blog2018 (3) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... of the certificate issued by the Range Supdt. of the factory of the manufacturer or supplier. We find that there is no allegation in the show cause notice that the appellant did not knew the supplier Simandhar and/or its proper address. Even in a situation where explanation to Rule 9(3) is not attracted it would be open to an assessee to establish independently within the meaning of the substantive part of Rule 9(3) that he had in fact taken reasonable steps - the respondents had purchased the goods for the price, which included the duty element, and the same was paid by cheque. Further there is no allegation that the respondents have sourced raw material in dispute, from some other source. We also find that under the scheme of the Act and the Rules, it would be impractical to require the assessee to go behind the records maintained by the first stage dealers. The respondent under the fact of this case were found to have duly acted with all diligence in their dealings with the first stage dealers Simandhar. The SCN are presumptive and not maintainable - appeal dismissed - decided against Revenue. - Appeal Nos. E/920, 921/08-Mum E/CO/157/08, E/CO/09/09-Mum - A/85307-85308/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the investigation it was alleged that the respondents have availed Cenvat credit on the strength of invoices issued by Simandhar whereas it appears that they did not receive any Cenvatable goods from its suppliers Simandhar. But Simandhar wrongly issued invoices for passing on Cenvat credit to the respondents. It appeared that credit has been availed by the respondents without receiving the inputs and therefore the credit was not admissible to the respondents. Accordingly the show cause notice issued to Jalna Sidhi Vinayak proposed disallowance of Cenvat credit of ₹ 1,45,71,115/- and in case of Mauli Steels proposed disallowance of Cenvat credit of ₹ 1,06,14,971/- having been availed on the basis of invoices issued by Simandhar for the period 2002 03 and 2003 04. Further interest and penalty was also proposed. 4. The SCN was adjudicated on contest and the learned Commissioner was pleased to drop the proposed demands. Being aggrieved the revenue is in appeal before this Tribunal. 5. Learned AR Shri V.K. Agarwal, Additional Commissioner, appearing for the revenue submitted that the registered dealer Simandhar had not maintained any proper records and fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that on receipt of the goods, the same are weighed and if the difference is less then 0.5% they do not mention the same, and in case the difference is more, issued debit notes to the suppliers. That all the transactions were recorded in the books of accounts ordinarily maintained. Further payments were made by cheques and the transactions were genuine. That MS scrap had been received under cover of invoices from Simandhar and hence credit was availed and the final product manufactured from the very same inputs, have been cleared upon payment of duty. So far the mismatch and/or error in the vehicle numbers is concerned, he stated that the same may be due to clerical errors by the clerk at the dispatch and. Further, Shri Dhariwal had stated that on receipt of material they do not check the vehicle numbers, nor verify the registration book of vehicles and hence could not notice the discrepancy. That sometimes a vehicle may have bogus number plate, which they are unable to make out. They also submitted their Ledger along with bank statement, regarding the transactions. Regarding parallel invoices, Shri Dhariwal stated that all the invoices received by them were mentioning duty p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion amount and date, so that they may investigate the Gujarat dealers. Thus it is evident that the investigation was not complete by the Sales-Tax Dept. of Gujarat. Further the ruling in the case of Bhagwati Steel is not applicable as the facts are distinguishable. In the case of Bhagwati, there was no gate entry register or GRN, whereas in the present case the respondents have maintained security or gate register. Further in the case of Bhagwati, there was investigation at the units supplying MS scrap to Simandhar, whereas in the present case there is no such investigation. The ruling in the case of the Vipras Casting (supra) is also distinguishable as in the said case the goods were not MS scrap and could not be melted whereas in the present case the goods are MS scrap. In the case of Bhagwati, the manufacturer s invoice were issued by closed units to Simandhar, which is not the fact in the present case. Thus the credit availed by the respondents on the basis of invoices received, along with the goods, the same being specific documents in terms of Rule 7(3) of CCR 2002, after being satisfied with the identity of the supplier. That there is no evidence led in the SCN that the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be not suitable. Further allegation is that Simandhar issued fake and parallel invoices to the respondents. It was also alleged that the respondents have not physically received the material because the dealer Simandhar had not received the said material from its suppliers from Gujarat. 10. The learned Commissioner have observed that as per rule 9(5) of CCR 2002, a manufacturer is required to maintain proper records for the receipt, disposal, consumption and inventory of the inputs and capital goods, showing value, duty paid, credit taken/utilized, person from whom inputs procured and the burden of proof regarding the admissibility of the Cenvat credit shall be upon the dealer taking such credit. Further the CBEC manual of supplementary instructions provides that the admissibility of amount of Cenvat credit should be discernible from the records of the manufacturer, includes the payment made to the sellers of input and capital goods. The basic onus lies upon manufacturer to prove that inputs or capital goods were purchased and valued paid by him for the intended purpose. The learned Commissioner further observed that the respondent units availing Cenvat credit can only prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se duty or the additional duty of customs, as the case may be, either from his personal knowledge or on the strength of a certificate issued by person with whom he is familiar or on the strength of the certificate issued by the Range Supdt. of the factory of the manufacturer or supplier. We find that there is no allegation in the show cause notice that the appellant did not knew the supplier Simandhar and/or its proper address. We further find that the facts herein are squarely covered by the ruling of Hon ble High Court in the case of Juhi Alloys Limited (supra) wherein under somewhat similar facts and circumstances, where the manufacturer named in the invoice of the dealer was found to be non-existent, the Hon ble High Court relying on the deeming fiction, as provided in explanation to Rule 9(3) of CCR 2004, which is equal to rule 7(2) of CCR 2002 and explained that when a manufacturer or a purchaser of excisable goods would be deemed to have taken reasonable steps. Even in a situation where explanation to Rule 9(3) is not attracted it would be open to an assessee to establish independently within the meaning of the substantive part of Rule 9(3) that he had in fact taken reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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