2007 (4) TMI 143 - AT - Central Excise

Cenvat/Modvat - Revenue contended that respondent is not entitle for credit on the ground that they avail credit on the basis of fake invoices received by the input supplier - Revenue contention was not supported by any evidence and accordingly set aside

Summary

Issues: Alleged issuance of fake invoices for availing Cenvat credit, imposition of penalty under Central Excise Rules, 2001 and 2002, jurisdiction of Delhi Commissionerate, validity of Cenvat credit availed by respondent Nos. 2 & 3.

Analysis:
1. The case involves the alleged issuance of fake invoices by a supplier (respondent No. 1) to two manufacturers (respondent Nos. 2 & 3) for availing Cenvat credit. Central excise officers visited the factory and seized invoices from the supplier, leading to show cause notices being issued to all parties. The adjudicating authority dropped the proceedings, but the Revenue appealed against the decision.

2. The Revenue argued that the lower authorities ignored the statement of the supplier's authorized signatory, alleging that the buyer availed credit on fake invoices. They also mentioned a show cause notice issued to the supplier for passing credit without physically supplying goods. The Revenue contended that penalties should have been imposed on the respondents.

3. The supplier's representative countered, stating that they manufactured and cleared inputs, supported by duty documents and RT-12 returns. They disputed the show cause notice mentioned by the Revenue, claiming it was beyond the original scope. They argued against penalties and jurisdiction issues raised by the Revenue.

4. The manufacturers (respondent Nos. 2 & 3) reiterated that they received goods with proper documents from the supplier, citing a transporter certificate. They highlighted evidence supporting their receipt of genuine goods and challenged the Revenue's reliance on uncorroborated statements. They referenced a Tribunal decision supporting their position.

5. The judgment emphasized that the Revenue's case relied heavily on the statement of the supplier's authorized signatory, which lacked corroborating evidence. In contrast, the manufacturers provided multiple documents supporting their receipt of goods with duty documents. The Tribunal's decision in a similar case was cited to support the rejection of the Revenue's appeal.

6. The judgment concluded that the allegations against the supplier for issuing fake invoices were premature until the pending show cause notice was resolved. It noted the lack of evidence supporting the Revenue's claims and upheld the lower authorities' decision to allow Cenvat credit to the manufacturers. The Revenue's appeals were dismissed based on the evidence presented and the lack of merit in their arguments.