2013 (5) TMI 294 - AT - Central Excise

Denial of credit imposition of interest/ penalty - Credit had been taken without receiving any goods on the basis of bogus invoices Held that - In view of the fact that the order of the Tribunal was not challenged and also the fact that appellant did not prove receipt and use of the goods in the manufacture of find products, there is no infirmity in the order passed by the Commissioner (Appeal). Accordingly I uphold the order in appeal and reject the appeal of the appellant.

Summary

Issues:
1. Denial of Cenvat Credit based on alleged receipt of goods under bogus invoices.

Analysis:
The case revolves around an appeal filed by M/s. Harsaran Dass Sita Ram prop. Desh Metal Works against the order passed by the Commissioner & Central Excise, Panchkula, denying Cenvat Credit amounting to Rs. 1,97,363/- along with interest and imposing penalties under section 11AC. The appellant, a manufacturer of brass & copper products, claimed to have received copper rods under 3 invoices of M/s. R.K. Enterprises, a registered dealer. However, the Department alleged that no goods were actually received, and the Cenvat Credit was availed based on bogus invoices. The Assistant Commissioner, Commissioner (Appeal), and the Tribunal were involved in the adjudication process.

The appellant argued that the precedent set by the Tribunal in the case of Rajiv Alloy Ltd. was not applicable to their situation, as the circumstances differed significantly. They contended that the evidence presented by the Department did not substantiate the claims against them. On the other hand, the Department maintained that the burden of proof lay with the appellant to demonstrate the authenticity of the invoices, especially considering the recovery of multiple rubber stamps from the appellant, indicating potential irregularities in transactions.

Upon review, the Tribunal noted that in a previous order, it was established that the goods dispatched by M/s. R.K. Enterprises were under fabricated GRs, and the owner of a truck involved in transportation denied any knowledge of such transactions. The Commissioner (Appeal) upheld the decision, emphasizing that the burden of proof regarding the receipt and utilization of goods in manufacturing lay with the appellant. As the appellant failed to challenge the Tribunal's earlier order and did not sufficiently prove the receipt and use of goods, the Commissioner's decision was deemed valid, leading to the rejection of the appellant's appeal.