TMI Blog2018 (5) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant - The said show cause notice only discussed about the transaction between M/s. AIP Industries Limited and M/s. National Udyog. M/s. National Udyog is first stage dealer and any first stage dealer is not required to receive the goods only from one manufacturer. Had there been any investigation establishing that the inputs on which Cenvat credit was availed, as entered in the invoices issued by the first stage dealer, were the same goods which were involved in the investigation about the transaction between M/s AIP Industries and M/s National Udyog, then only this show cause notice could have sustained. In the present case, the assessee is found to have duly acted with all reasonable diligence in its dealings with the first stage dealer - the ruling in the case of CCE vs. Juhi Alloys Limited [2014 (1) TMI 1475 - ALLAHABAD HIGH COURT] squarely applies to the present case, where it was held that Admittedly, in the present case, the assessee was a bona fide purchaser of the goods for a price which included the duty element and payment was made by cheque. The assessee had received the inputs which were entered in the statutory records maintained by the assessee, credit re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieved from the said order, all the appellants are before this Tribunal. 3. The Ld. Counsel appearing on behalf of the appellants submits that the denial of Cenvat Credit to the appellants on the basis of goods supplied by the M/s. National Udyog and M/s. Ridhi Sidhi Alloys Pvt. Ltd. is not sustainable. As M/s. Ridhi Sidhi Alloys Pvt. Ltd, is a manufacturer of copper nickel alloys ingots which have been received by the appellant and the same has not been disputed by the Revenue in the show cause notice. As M/s. Ridhi Sidhi Alloys Pvt. Ltd. has paid duty on the goods supplied by them to the appellant, therefore, the Cenvat Credit cannot be denied. 4. With regard to the supplies made by the National Udyog, the Id. Counsel submits that it is not the case of the Revenue that M/s. National has not supplied goods along with duty paying invoices to them and they have made the payment through account payee cheque. It is not the case of the Revenue that goods have never transported from M/s. National Udyog to the appellant, therefore, the appellant has received the goods against the duty paying document, therefore, they are entitle to avail Cenvat Credit on those goods in the light of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal observed as under:- 7. The main allegation of the Revenue is that M/s. AIP Industries is not having manufacture facility, therefore, Cenvat Credit is not available to the Respondent. To support his contention Ld. AR heavily relied on the decision in the case of Harsaran Dass Sita Ram (supra). In the said case in earlier round of proceedings after examining the facts of the case this Tribunal came to the conclusion that assessee who is availing Cenvat Credit has to prove that they have received the goods. Therefore, the Tribunal came to the finding that burden of proof in the facts of that case was on the assessee availing Cenvat Credit. Further in second round of litigation it was held that assessee has failed to prove cogent evidence that they have received the goods in their factory and then it was concluded that they are not entitled to take Cenvat Credit. In fact, facts of this case are somewhat different as in the impugned order itself ld. Commissioner (A) has come to the conclusion that respondent has been able to prove that they have received the goods in their premises. Therefore, the said facts are not applicable to the facts of this case. Further, I have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain the fact that respondent has not received the goods. In these circumstance, I do not find any infirmity with the impugned order on merits. Further, I find that in this case show cause notice has been issued in September, 2011 whereas transaction involved the period August, 2006 to September, 2006. Therefore, I hold that show cause notice is barred by limitation also. IN these circumstance, impugned order is upheld. Appeal filed by the Revenue is dismissed. Further examined in the case of CCE Vs. Juhi Alloys Ltd. (supra) and observed as under : 6. On going through the impugned order of Commissioner (Appeals), I find that he has held M/s., Juhi Alloys Ltd., recipient of the inputs from M/s. M.K. Steels, eligible to avail Cenvat credit inasmuch as the invoices issued by M/s. M.K. Steels are the proper invoices and M/s. Juhi Alloys have taken due precaution in terms of Rule 7(4) of Cenvat Credit Rules, 2002 and Rule 9(5) of the Cenvat Credit Rules, 2004. The said recipient has placed orders on M/s., M.K. Steel for procurement of the raw materials through a broker. It is also not in dispute that the said inputs covered by the invoices raised by M/s. M.K. Steels Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case that M/s. M.K. Steels was registered as a dealer with the Revenue and the invoices issued by him reflected his registration number. As such, I fully agree with the finding of the appellate authority that denial of credit to the respondent manufacturing unit on the ground that first stage dealer has fraudulently received the goods is neither proper nor justified. Reliance by the appellate authority on various Tribunal's decision is proper. The order of this Tribunal in the case of CCE Vs. Juhi Alloys Ltd (supra) was examined by the Hon ble High Court of Allahabad and the Hon ble High Court has observed as under: 7. In the present case, both the Commissioner (Appeals) and the Tribunal have given cogent reasons to indicate that the assessee had taken reasonable steps to ensure that the inputs in respect of which he has taken the Cenvat credit are goods on which the appropriate duty of excise, as indicated in the documents accompanying the goods, has been paid. Admittedly, in the present case, the assessee was a bona fide purchaser of the goods for a price which included the duty element and payment was made by cheque. The assessee had received the inputs which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue that M/s. Ridhi Sidhi Alloys Pvt. Ltd. is not a manufacturer and have not manufacture the goods in question which has been supplied to M/s. JSL against duty paying documents. In that circumstances, the investigation conducted at the end of the M/s. API Industries have not relevance to the facts of the case to denying Cenvat Credit against the invoices issued by M/s. Ridhi Sidhi Alloys Pvt. Ltd. to the M/s. JSL along with goods. 10. In view of above analysis, we hold that M/s. JSL has correctly taken the Credit on the goods supplied by the M/s. National Udyog and M/s. Ridhi Sidhi Alloys Pvt. Ltd. Therefore, impugned order deserves no merit, hence, is set aside. 11. In result, the appeals filed by the appellants are allowed with consequential relief (if any). (Dictated and pronounced in the open court) Ashok Jindal, Member (Judicial) Per: Devender Singh 12. After going through the draft order of learned Brother Member (J), I record separate order. 13. It has been alleged in the show cause notice that the appellant received the impugned goods through two modes - (i) Cupro Nickle Ingots through M/s. National Udyog Limited, registered d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ongi Post vide letter endorsement No.2694 dated 20.1.2011 has been sent by the Deputy Commissioner, Central Excise Ropar along with his letter C. No.CE-20/Misc. enquiry/Prev /PPR/2009/386 dated 24.1.2011. The said report reads as under:- that as per computer data of their ICC, the vehicles (list provided as per details given above) have not been existed this ICC with the said goods on the dates of GR and near about dates and these transactions are not recorded on the ICC Balongi . 39. I also find that Assistant Commissioner (Prev.), Ludhiana vide his letter C.No.IV(Hq)/05/24/11 dated 22.09.2011 has also sent his verification report in respect of GR Nos., Truck Nos.as well as Transporter-operators who had shown to have transported goods from M/s. AIP Industries, Ludhiana to M/s. National Udyog, Hissar along with the statement dated 21.9.2011 of Shri Malkit Singh, Partner of M/s. Amirtsar Ludhiana Transport Co. recorded under Section 14 of Central Excise Act, 1944. I find that the said Statement dated 21.09.2011 that Shri Malkit Singh, has admitted that they had started the work of transportation goods carried between Ludhiana to Amritsar and vice versa in the year 2004; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004. The CST No. mentioned on the GRs does not belong to them as they had not even applied for CST No. They did not have the mark of Swastika on their GRs and they had never signed in Punjabi. They had never transported any goods to Hissar and were working for Punjab area. All the GRs are bogus and do not belong to their firm. Thus, it is established that that the impugned goods have not been transported in the vehicles mentioned in the invoices of M/s. AIP Industries, Ludhiana and therefore no such goods were received by M/s. National Udyog, Hissar. Proceedings against M/s. AIP have already attained finality by Tribunal vide Final Order dt.12.8.2013 which has been affirmed by Hon'ble Punjab Haryana High Court vide its order dt.10.12.2014. As such, the entries in RG-23D register of M/s. National Udyog of goods received from AIP Industries are bogus and fraudulent. Clearly, the invoices issued by M/s. National Udyog to M/s. JSL Stainless Steel without actually receiving the goods were bogus and fraudulent and Cenvat credit taken on such invoices was fraudulent. 19. Another contention of the appellant is that they had entered the goods in RG-23A Part-I. However, I obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the inputs could not have been received in the factory in vehicles mentioned in the invoices. This allegation itself IS based on the reports by RTOs, who certified that the registration numbers belonged to vehicles other than goods transport vehicles with 10 tons capacity. It is for the appellants thereupon establish that indeed such vehicles as mentioned in the invoice did bring the input to their factory. They have failed to do so. Their gate register was burnt in some fire accident and the bills/vouchers indicating payment of cash to the drivers/owners of the trucks were also, destroyed in fire. One could understand that bills/vouchers, getting destroyed in fire or lost. But one cannot understand as to what has happened to the ledgers and registers to which the transactions done in cash are ultimately transferred. It is not the appellant's case that even such ledger and registers were destroyed in the fire. The fact that the Inputs in the form of ship-breaking scrap was entered in RG 23A, Part-I does not establish that the goods were received in the factory. At least two truck owners have categorically denied having transported any goods to the appellant. The plea tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mponents Pvt. Ltd. Vs. CCE - 2016 (343) ELT 576 (Tri.-DeI.), which is Single Member order and not binding. The said case has mainly relied upon on case of Juhi Alloys Ltd., which has already been distinguished above. Besides, in that case there appears to be no verification done from Excise and Taxation Office and from the transporter, unlike in the present case. Hence, this case also does not come to rescue of the appellant. 22. The appellant have also relied upon the case, S.K. Foils Ltd. Vs. CCE - 2015 (315) ELT 258 (Tri.-DeL.). In the said decision of a Single Member Bench of this Tribunal, facts show that cenvatable invoices were issued by second stage dealer, Besides, in the said case, the Commissioner (Appeals) had recorded a finding that the appellant had received the goods whereas in the present case, the allegation of the Revenue is that the goods have not been received by the appellant. Hence, the facts being different, the ruling of the said case is not applicable to the present case. 23. In view of the above foregoing, I hold that the credit of ₹ 1,72,74,939/- during the period October, 2006 to April, 2007 on the strength of invoices issued by Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether, in the facts and circumstances of the case and evidences placed on record, the Member (Technical) is correct in holding that appellant M/s. JSL Stainless Limited is not entitled to avail Cenvat credit on the invoices issued by M/s. National Udyog and consequently, Cenvat credit is required to be reversed along with interest and the appellant is to be penalised and penalty under Rule 26 (2) is to be imposed on M/s. National Udyog, Shri Ram Kishan Gupta and Shri Jagdish Jindal for the period after 01.03.2007, as per the order of Member (Technical). (Points of difference pronounced in the court on 14.12.2017) Devender Singh Member (Technical) Ashok Jindal Member (Judicial) Per : Mr. Anil G. Shakkarwar Heard on difference of opinion, in respect of M/s/. JSL Stainless Limited, National Udyog, Shri Ram Kishan Gupta, vice President and Shri Jagdish Jindal, partner. 2. Ld. Counsel for the appellant submitted that it is undisputed fact as recorded in Para 9 of the show cause notice dated 04.10.2011 that the inputs dispatched from M/s National Udyog Limited, Hissar have been found entered into RG-23 part-I and II of the register maintaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the first stage dealer, were the same goods which were involved in the investigation about the transaction between M/s AIP Industries and M/s National Udyog, then only this show cause notice could have sustained. I further find that Hon ble High Court of Allahabad has ruled in the above stated case that it would be impracticable to require the assessee to go behind the records maintained by the first stage dealer. In the present case, the assessee is found to have duly acted with all reasonable diligence in its dealings with the first stage dealer. In view of the above, I find that the ruling of Hon ble High Court of Allahabad in the case of Juhi Alloys Limited (supra) is squarely applicable to the present case. 5. I, therefore, agree with the order passed by Member Judicial. 6. With this opinion, I refer the matter back to the Division Bench. (Order dictated and pronounced in the open court) (Anil G. Shakkarwar) Member (Technical) Majority Order In view of the majority decision the appeals are allowed. (Order pronounced in the court on 26.03.2018.) Devender Singh Member (Technical) Ashok Jindal Member (Judicial) - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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