TMI Blog2022 (11) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer can take only those steps which are within his control and can not be expected to verify the records of the supplier to check whether in fact he had paid duty on the goods supplied by him. The only reasonable steps which he can take is to ensure that the supplier is trust-worthy, as the inputs are in fact received and the documents, prima facie, appeared to be genuine - The Circular of the Central Board of Excise and Customs dated 15.12.2003 clarifying that CENVAT Credit should not be denied to a user manufacturer as long as bona fide nature of the consignee s transaction is not doubted. Hon ble Allahabad High Court in the case of THE COMMISSIONER OF CENTRAL EXCISE CUSTOMS SERVICE TAX VERSUS M/S. JUHI ALLOYS LTD., ANIL KUMAR SHUKLA [ 2014 (1) TMI 1475 - ALLAHABAD HIGH COURT ] held that the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken CENVAT Credit were goods on which appropriate duty of excise was paid. Once, it is demonstrated that reasonable steps had been taken which is a question of fact in each case it would be contrary to the Rule to cast impossible and impractical burden on the assessee. Extended period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant is in Appeal before this Tribunal assailing the Order of the Ld.Commissioner(Appeals) for denial of CENVAT Credit on Furnace Oil. The facts of the case in brief are that during the month of September 2012, the Appellant purchased 15,711 Kilo Litres of Furnace Oil for an amount of Rs.7,28,978/- from one of the vendors viz. M/s.Sri Kamala Udyog having its factory at 1/A/29, S.S.Road (Extn.), Rishra, Serampore, Dist: Hooghly, who is also a registered assessee with the Central Excise Department vide Invoice No.SKU/205/1213 dated 22.09.2012 and availed CENVAT Credit of Rs.92,660/- (including Cess). Show Cause Notice dated 27.01.2016 was issued on the ground that M/s. Sri Kamala Udyog has no existence and no plant and machinery are there in their declared premises and they are not performing any manufacturing activities. It is alleged that said M/s.Sri Kamala Udyog had undertaken only paper transactions and issued fake Central Excise invoices. Hence the CENVAT Credit availed by the assessee against the invoice issued by the alleged fraud manufacturer cannot be treated as CENVAT in terms of Rule 3 and the invoices are not proper documents under Rule 9(1)(a) of CENVAT Credit R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the genuineness of the transactions. 5. The Ld. Authorized Representative for the Department justified the impugned orders and prayed that the Appeal be dismissed, being devoid of merits. 6. Heard both sides and perused the appeal records. 7. The only dispute to be decided in the present Appeal is whether the Appellant can be denied CENVAT Credit of Rs.92,660/- only on the basis of alert circular. It is not in dispute that the Appellant is in possession of the Cenvatable invoice which satisfies all the conditions of the Rule 9(1) of the CENVAT Credit Rules, 2004 i.e. the invoice of manufacturer/supplier, mentioning the name of the supplier, factory and place of removal, Central Excise Registration Number, Range Office address, Division office address, Commissionerate, VAT and CST Number, PAN, date and time of preparation of invoice, date and time of removal, mode of transportation, Registration Number, Central Excise Tariff Item, description of goods, quantity, rate per unit, total value, Excise duty and other Cesses, CST and declared Excise duty payable (in words), confirming to the requirement under Rule 11 of the Central Excise Rules, 2002 read with Rule 9 of the CE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the goods supplied by him. The only reasonable steps which he can take is to ensure that the supplier is trust-worthy, as the inputs are in fact received and the documents, prima facie, appeared to be genuine. The Circular of the Central Board of Excise and Customs dated 15.12.2003 clarifying that CENVAT Credit should not be denied to a user manufacturer as long as bona fide nature of the consignee s transaction is not doubted. Moreover, if the manufacturer supplier has received payment from the buyer in respect of goods supplied including excise duty, action should not be initiated against him under Section 11D and 11DD and CENVAT Credit should not be denied to the assessee. 10. I find that the Hon ble Allahabad High Court in the case of Commissioner of Central Excise, Csutoms Service Tax Vs. Juhi Alloys Ltd. [2014 (302) E.L.T. 487 (All.)] held that the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken CENVAT Credit were goods on which appropriate duty of excise was paid. Once, it is demonstrated that reasonable steps had been taken which is a question of fact in each case it would be contrary to the Rule to cast impossible an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rule 9(3) of the Rules of 2004, insofar it is material, provides as follows :- (3) 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 shall take all reasonable steps to ensure that the input or capital goods or input service in respect of which he has taken the Cenvat credit are goods or services on which the appropriate duty of excise or service tax as indicated in the documents accompanying the goods or relating to input service, has been paid. 5. The Explanation to Rule 9(3) of the Rules of 2004 provides a deeming fiction where a manufacturer or producer of excisable goods who takes Cenvat credit on inputs, would be deemed to have taken reasonable steps, if he satisfies himself about the identity and address of the manufacturer or supplier or provider of input services, as the case may be, issuing the documents specified in sub-rule (1) on the basis of his personal knowledge or on the basis of a certificate given by a person with whom he is familiar or on the basis of a certificate issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. 7 . The judgment of the Division Bench of the Himachal Pradesh High Court in A.B. Tools Limited v. Commissioner of Central Excise 2010 (256) E.L.T. 382 (H.P.), on which reliance has been placed by the revenue, does not indicate that any contrary view of the law has been taken. 8 . Ultimately, the issue in each case is whether, within the meaning of Rule 9(3) of the Rules of 2004, the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken Cenvat credit were goods on which appropriate duty of excise was paid. Once it is demonstrated that reasonable steps had been taken, which is a question of fact in each case, it would be contrary to the Rules to cast an impossible or impractical burden on the assessee. For the aforesaid reasons, these appeals do not give rise to any substantial question of law. They are, accordingly, dismissed. Once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention that M/s. Sri Kamala Udyog existed on 30.07.2013 even. 13. With all these undisputed facts, the Appellant being a bonafide purchaser of goods for a price which included the duty element and payment made by cheque, having received the inputs at his premise and entered into the statutory records maintained by the Appellant demonstrating transportation of goods from Rishra Road, Hooghly, West Bengal to Chancha Industrial Estate, Baripada, Mayurbhanj, the Appellant has rightly availed CENVAT Credit with the required Cenvatable documents. 14. It is pertinent to state here that the Central Excise Service Tax Audit for the period 2012-13 to 2014-15 was undertaken by the department on 28.05.2016. Scrutinizing the Books have issued DAR No. BBS-II/GR-12/2015-16/CE/49 FAR No. BBS-II/GR-12/2015- 16/CE/55 issued by the Asst. Commissioner, Bhubaneswar-II Circle, which was placed approved in the MCM. No adverse inference has been drawn against the CENVAT Credit availed no cogent evidence contrary to the above submission has ever been established. 15. In view of the above discussions, it is my considered view that the impugned orders cannot be sustained and are accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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