2013 (8) TMI 424 - AT - Central Excise

Wrong availment of Cenvat Credit on input - Cenvat Credit denied and demanded from the appellant by invoking proviso to Section 11A(1) of the Central Excise Act, 1944 (the Act) on the ground that the first appellant had not received the inputs but has taken the credit of the same during the period from April 2004 to October 2007 - Held that - By denying cross-examination and re-examination of the evidence with regard to the transportation, these submissions have escaped consideration totally - Further, in case where only NOC had been issued by RTO as submitted, it cannot be said that the vehicle may not have been used. In such a case, evidence available to the department becomes only submission of the owner without any documentary evidence - There was a need for consideration as to whether cross-examination of the owners of the vehicles was required in the context of the facts and circumstances in respect of the each vehicle. Further, since the issue relating to SOL is based on data of logbook and statement of Managing Director of the appellant-company, there was a need for consideration of request for cross-examination - On the whole, the request for cross-examination has not been dealt with adequately - Matter is remanded to the original adjudicating authority for fresh consideration of the whole case.

Summary

Issues:
Denial of CENVAT credit on inputs received by the appellant, imposition of penalties, waiver of pre-deposit, consideration of stay petitions, transportation of goods from consignment agents to factory, cross-examination of witnesses, non-transportation proof from RTO, fresh adjudication by original authority.

Analysis:
The judgment involves the denial of CENVAT credit of Rs. 42,30,415/- to the first appellant, a manufacturer of PVC Compounds and Master Batches, for allegedly taking credit without receiving the inputs during April 2004 to October 2007. Penalties were imposed on both the appellant and the authorised signatory. The Tribunal decided to grant a waiver of pre-deposit and proceed with the final decision on the appeals rather than considering stay applications. The appellants argued that they received inputs through consignment agents located nearby, maintaining statutory records, and provided detailed accounts of the transportation process and payments made to drivers. The investigating officer's report raised concerns about vehicle registration numbers and ownership, leading to the denial of CENVAT credit. The appellants requested cross-examination of various individuals, including owners of vehicles and drivers, to establish the physical transportation of goods, which was not granted by the adjudicating authority.

The lower authorities upheld the denial of credit, emphasizing document-based evidence and non-transportation proof obtained from the RTO. However, the Tribunal found merit in the appellants' submissions regarding the possibility of goods transportation and the necessity of cross-examination to verify facts. It highlighted the need for a thorough consideration of the transportation process and the distance between the consignment agents and the factory. The Tribunal concluded that the matter should be remanded to the original adjudicating authority for a fresh examination, emphasizing the importance of detailed evidence appreciation and consideration of the appellants' claims.

In summary, the Tribunal set aside the impugned order, remanding the case for fresh adjudication in accordance with the law. The decision to grant a waiver of pre-deposit was upheld, and the appeals were allowed by way of remand, emphasizing the need for a more detailed analysis of evidence and claims put forth by the appellants.