2016 (1) TMI 1246 - AT - Central Excise

CENVAT credit - non-existent dealer - adequate information not provided - investigation at the end of the appellant has been done after four and half years of the investigation started at the end of manufacturer/supplier and not even the factory of the appellant was searched - Held that - as per the provision of Central Excise Act or the Rules there is no duty cast on the appellant for verification of contents of manufacturer/supplier before procuring the goods as it has been given without credible evidence by the Revenue that the appellant has not received the goods - the credit cannot be denied to the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of credit on inputs due to non-existent supplier/manufacturer and locked dealer premises.

Analysis:
1. The appellant, engaged in manufacturing steel bars, appealed against the denial of credit on inputs due to issues with the supplier and manufacturer.
2. An investigation revealed that the manufacturer M/s. Jaikara Steel Rolling Mills was non-existent, and the dealer M/s. Jyoti Steels' premises were found locked.
3. The appellant admitted to receiving goods from the dealer, which were used in manufacturing final products, with payments made through account payee cheques.
4. The lower authorities denied credit, demanding duty, interest, and imposing a penalty, leading to the appellant's appeal.
5. The appellant argued that no investigation was conducted at the dealer's end, and the transporter's involvement was not verified, relying on relevant tribunal decisions.
6. The learned AR supported the denial of credit based on the non-existence of manufacturing facilities by the supplier/manufacturer.
7. The Tribunal observed the delayed investigation at the appellant's end, the goods being recorded in statutory records, and no verification of the transporter's role.
8. The Tribunal held that the appellant was entitled to credit as there was no duty to verify the supplier/manufacturer's contents before procurement without credible evidence of non-receipt.
9. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

This detailed analysis highlights the key arguments, findings, and legal reasoning in the judgment regarding the denial of credit on inputs due to issues related to the supplier/manufacturer and locked dealer premises.