2011 (6) TMI 424 - AT - Central Excise

Cenvat credit denied - Penalty - Held that - The investigation at the suppliers, end clearly showed that the suppliers have stated that they merely supplied the invoices without supplying the goods. Further, the vehicles which were shown to have used for transporting as per invoices were stated to be either incapable of transporting that much quantity or were not used for transporting the goods. Appellants have failed to discharge the burden of proof that they have received the duty paid goods as mentioned in the invoices - against assessee.

Summary

Issues:
Appeal against order of Commissioner (Appeals) regarding recovery of wrongly taken Cenvat credit and imposition of penalty.

Analysis:
The appellant, a manufacturer of various products, had Cenvat credit based on invoices for insulated copper wire from M/s. Satvik Inds. However, during an investigation, it was revealed that the invoices were issued without actual material supply. The show cause notice was issued for recovery of wrongly taken Cenvat credit and penalty imposition. The Asst. Commissioner confirmed the demand and penalty, which was upheld by the Commissioner (Appeals).

Grounds of Appeal:
The appellant argued that they regularly filed E.R. Returns with invoices, seen by the Range Officer, and thus the show cause notice was time-barred. They also contended that the statement by Shri Rajesh Jain did not conclusively prove non-receipt of goods and raised issues regarding time plea and supply to a Government Department. The appellant cited precedents to support their case.

Counter-Arguments:
The SDR reiterated the findings that invoices were issued without actual goods supply, as admitted by the supplier. The vehicles mentioned in the documents were incapable of transporting the stated quantity. The burden of proof was on the appellant to show receipt of goods, which they failed to do.

Judgment:
After considering submissions and evidence, the Tribunal found that suppliers admitted to supplying only invoices without goods. The burden of proof lay with the appellant, who failed to demonstrate receipt of goods as per invoices. Precedents cited were distinguished based on lack of evidence from suppliers. Consequently, the appeal was rejected, affirming the Commissioner (Appeals)'s decision.