2016 (4) TMI 1159 - AT - Central Excise

Denial of CENVAT credit - Iron & Steel Product - investigation in the premises of dealer - whether the denial of credit justified on the ground that the dealer was non-existent and only paper transaction took place? - Held that - no investigation was conducted at the end of manufacturer supplier/transporter and the available evidences establish that the assessee has received the goods in the absence of any contrary evidence. On record the cenvat credit cannot be denied to the assessee merely on the ground that at the time of investigation the dealer was non-existent. In fact when the goods were procured by the assessee the dealer was registered with the department. In these circumstances no merit in the revenue s appeal - appeal rejected - CENVAT credit allowed - decided in favor of assessee.

Summary

Issues:
- Denial of cenvat credit based on non-existence of dealer/supplier during investigation.
- Discrepancy in cenvat credit availed by the assessee on invoices from the dealer.
- Appeal by both assessee and revenue against the adjudicated order.
- Verification of dealer's registration and storage capacity.
- Burden of proof on the revenue regarding denial of cenvat credit.
- Comparison with a similar case involving M/s Accurate Auto Product Ltd.
- Applicability of previous tribunal decisions on the current case.

Analysis:
- The judgment revolves around the denial of cenvat credit to the assessee due to the non-existence of the dealer/supplier during investigation. The assessee availed credit on invoices from the dealer, M/s Sidh Balak Enterprises, who was found to be non-existent and lacking storage capacity. The adjudicating authority confirmed the demand, leading to appeals by both the assessee and revenue against the order.

- The assessee argued that the revenue failed to verify the dealer's registration and storage facilities, emphasizing that payments were made through proper channels and goods were recorded in statutory records. They cited a similar case involving M/s Accurate Auto Product Ltd. where cenvat credit was allowed due to lack of corroborative evidence against the assessee.

- The revenue contended that since the dealer was non-existent and denied supplying goods, cenvat credit should be rejected. They referred to a tribunal decision in the case of Neelkanth Steel & Agro Industries to support their stance on transit sales and invoicing procedures.

- Upon careful consideration, the tribunal found similarities with the M/s Accurate Auto Product Ltd. case, where lack of evidence against the assessee led to cenvat credit allowance. The tribunal differentiated the current case from Neelkanth Steel & Agro Industries, highlighting the presence of storage facilities for the appellant and the lack of investigation at the supplier/transporter end.

- Ultimately, the tribunal dismissed the revenue's appeal, stating that the assessee was entitled to cenvat credit as no contrary evidence proved non-receipt of goods. The judgment favored the assessee, setting aside the denial of cenvat credit and allowing their appeal, while dismissing the revenue's appeal.

This detailed analysis of the judgment provides insights into the issues raised, arguments presented by both parties, and the tribunal's reasoning leading to the final decision in favor of the assessee.