2012 (10) TMI 263 - HC - Central Excise

Denial of cenvat credit alleged that duty paid raw material as shown in the duty paying documents were not physically received in its factory Held that - Merely reliance placed upon the report of the transporter for the purpose of holding that the assessee had in fact not received the goods referred to in the invoices - all documentary evidence on record supported the assessee s case about the receipt of inputs, whereas there was no independent corroborative evidence produced on record by the revenue in support of its case - except for the goods registers maintained by the transporter, there is no other evidence on record to indicate that the assessee has in fact not received the goods in question cenvat credit allowed

Summary

Issues:
1. Interpretation of Rule 3 and Rule 9 for availing CENVAT credit based on invoices.
2. Allowance of CENVAT credit based on invoices without actual receipt of goods.
3. Determination of goods received by the assessee based on evidence.
4. Allowance of credit based on invoices showing goods not received by the dealer.
5. Manufacturer's right to take credit based on documents without receipt of goods.

Issue 1: Interpretation of Rule 3 and Rule 9 for availing CENVAT credit based on invoices.
The appellant challenged the Tribunal's order regarding the interpretation of Rule 3 and Rule 9 of the Central Excise Act, 1944, questioning whether CENVAT credit can be availed solely based on invoices, even if the actual goods mentioned in the invoices were not received in the factory. The investigation revealed the appellant was obtaining duty paid invoices without receiving the actual inputs, leading to the dispute over the admissibility of CENVAT credit.

Issue 2: Allowance of CENVAT credit based on invoices without actual receipt of goods.
The investigation highlighted instances where the appellant availed CENVAT credit based on invoices of non-received inputs, raising concerns about the legitimacy of the credit claimed. The dispute revolved around whether the appellant was entitled to CENVAT credit when the actual goods were not physically received in the factory, despite possessing duty paying documents.

Issue 3: Determination of goods received by the assessee based on evidence.
The case involved scrutinizing evidence to establish whether the goods mentioned in the invoices were actually received by the assessee. The investigation revealed discrepancies in the transportation and receipt of goods, leading to a show cause notice and subsequent demand under the CENVAT Credit Rules, 2004.

Issue 4: Allowance of credit based on invoices showing goods not received by the dealer.
The appellant's practice of availing CENVAT credit based on invoices indicating goods not received by the dealer raised questions about the validity of such credit claims. The investigation exposed instances where invoices were issued without the corresponding goods reaching the dealer, casting doubt on the legitimacy of the credit availed.

Issue 5: Manufacturer's right to take credit based on documents without receipt of goods.
The Tribunal's decision on the manufacturer's right to claim credit based on documents received from suppliers, even in the absence of actual goods receipt, was a pivotal issue. The Tribunal's analysis focused on the documentary evidence supporting the manufacturer's claim of receiving inputs, emphasizing the lack of corroborative evidence from the revenue department to challenge the manufacturer's position.

In conclusion, the High Court dismissed the appeal, upholding the Tribunal's decision based on the proper appreciation of evidence on record. The Court found no substantial question of law warranting interference, as the Tribunal's findings were deemed reasonable and supported by the factual evidence presented.