Ess Bee Techno Cast Pvt. Ltd. and Ors. Vs. C.C.E., Ahmedabad-I - (Customs, Excise and Service Tax Appellate Tribunal) (13 Dec 2019)

Cenvat cannot be denied, when records are not held to be untrue or falsified

MANU/CS/0267/2019

Excise

The brief facts of the case are that, the Appellant are engaged in manufacture of Alloy Steel Castings. They were issued show cause notices that, they have availed credit on the basis of forged invoices issued by H.B. Metals. The statement of directors/authorized signatories of Appellant Units were relied upon that they did not receive the goods as described in invoice and the same cannot be used as input. It was also alleged that on scrutiny of corresponding purchase invoice of H.B. Metals, the same were not found to be available with the dealer which shows that the invoice were forged. It was proposed to deny the credit availed by the Appellant and to impose penalty. The demands were confirmed by the adjudicating authority and were upheld by the Learned Appellate Commissioner. Aggrieved, the Appellants have filed present appeals.

The credit has been denied to the Appellants on the ground that, the Appellant purchased Scrap of S.S./M.S. whereas the invoices were issued for SS Circle, MS Rounds & Bars, MS Flats and Pipes falling under Chapter 72 which are not their inputs. In case of some invoices, the back purchase invoice of consignor dealer were not found. The show cause notice also relied upon statements of Authorized signatory/directors of Appellant Unit that, the goods were not received.

The Appellants have shown purchase of goods in their statutory records and account books and the transactions stands recorded therein. Further, no dispute has been raised about the transportation of said goods to the Appellant Units. The Appellant has also shown production of goods from the purchased goods and it stands recorded in books of accounts as well as statutory records. No evidence of falsification of statutory or accounts is on record. Also there is no dispute about the consumption of impugned material and clearance of finished goods manufactured. Even if it is assumed that, the dealer's records does not show the purchase of impugned goods, but the fact remains that the Appellant's record are showing receipt of goods. Only on the basis of statements, the cenvat cannot be denied when the records are not held to be untrue or falsified. Present Tribunal’s views are based upon judgment of Hon'ble High Court of Allahabad in case of Commissioner of Central Excise, Customs & Service Tax vs. Juhi Alloys Ltd.

There are no investigations to the effect that, the Appellant purchased goods from elsewhere to the extent of quantity of goods allegedly not received by them. Also there is no evidence to show that the consideration paid for the Appellant's purchase and through banking channels towards alleged fictitious purchase and cash was received back by the Appellants. As per the facts and circumstance, the revenue could not establish the fraudulent availment of cenvat credit beyond doubt. The impugned orders and are set aside. Appeals allowed.

Relevant : Commissioner of Central Excise, Customs & Service Tax vs. Juhi Alloys Ltd. MANU/UP/0061/2014

Tags : CENVAT CREDIT FRAUDULENT AVAILMENT LEGALITY