2013 (11) TMI 1035 - AT - Central Excise

Bogus invoices issued for supply of scrap Burden to prove Held that - Following Ranjeev Alloys Limited Vs. CCE, Chandigarh 2008 (9) TMI 223 - CESTAT NEW DELHI - when the registration number of the vehicles mentioned in the invoice in which the goods are claimed to have transported is found to be fake or of two wheeler & three wheeler etc. not capable of transporting the goods mentioned in the invoice, the burden would shift to the assessee, who had taken Cenvat Credit on the basis of such invoice, to prove that the goods covered on the invoice were, indeed, received by him - Non-mentioning or wrong mentioning of vehicle number issued for the transportation of the goods does not bar any assessee to avail Cenvat Credit or any other benefit under Central E Only the production of creditable evidence in support of receipt of goods by the Respondent would shift the burden of proof to the Department - The Commissioner (Appeals) travelled beyond the scope of the remand has accepted newspaper reports as evidence produced by the Respondent which is totally incorrect - the invoices on the basis of which the Cenvat Credit used to be taken, were not required to be enclosed with the ER-1 Return - the burden is on the assessee to prove that they had received the goods covered under the invoices on the basis of which Cenvat Credit had been taken, it is the assessee who have to produce evidence in this regard and for this purpose they cannot ask the Department to produce evidence regarding alternative raw-material used by the respondent for manufacture of final products order set aside Decided in favour of Revenue.

Issues Involved:
1. Validity of Cenvat Credit availed based on invoices with incorrect vehicle registration numbers.
2. Burden of proof regarding the actual receipt of goods.
3. Reliance on newspaper reports as evidence.
4. Evaluation of evidence produced by the respondent.

Issue-wise Detailed Analysis:

1. Validity of Cenvat Credit availed based on invoices with incorrect vehicle registration numbers:
The respondent company availed Cenvat Credit of Rs. 72,543/- based on an invoice from M/s. Jayanti International. The vehicle number mentioned in the invoice was found to be a two-wheeler, which could not have transported the goods. This raised suspicions of a bogus invoice. The Assistant Commissioner confirmed the demand for Cenvat Credit along with interest and imposed penalties on the respondent and associated parties. The Commissioner (Appeals) initially upheld this decision, but the Tribunal remanded the case for de-novo adjudication, emphasizing the need for the respondent to prove the actual receipt of goods.

2. Burden of proof regarding the actual receipt of goods:
The Tribunal, in the remand order, referenced the judgment in Ranjeev Alloys Ltd. Vs. CCE, which established that once the Revenue shows that the vehicle mentioned in the invoice is not capable of transporting the goods, the burden shifts to the assessee to prove the receipt of goods. The respondent was required to produce evidence of actual receipt of goods during the de-novo proceedings. The Assistant Commissioner, in the de-novo order, confirmed the demand and penalties, while the Commissioner (Appeals) later set aside this order, citing various reasons including the common practice of trucks using fake number plates in Punjab.

3. Reliance on newspaper reports as evidence:
The Commissioner (Appeals) relied on newspaper reports indicating the widespread use of fake number plates by trucks in Punjab. It was argued that non-mentioning or wrong mentioning of vehicle numbers in invoices could be due to clerical errors and should not bar the assessee from availing Cenvat Credit. The Commissioner (Appeals) accepted these reports as evidence, which was contested by the Revenue, asserting that newspaper reports cannot be treated as credible evidence of the receipt of goods.

4. Evaluation of evidence produced by the respondent:
The Commissioner (Appeals) noted several points in favor of the respondent, including payment for goods by cheque, use of inputs in manufacturing final products, and the lack of alternative raw material evidence by the Department. The Commissioner (Appeals) also mentioned that the vehicles were weighed at Dharamkanta, which issued weighment slips containing the vehicle registration numbers. However, the Tribunal found that the Commissioner (Appeals) went beyond the scope of the remand order by accepting newspaper reports and making factually incorrect findings regarding the assessment of ER-1 Returns and the evidence of weighment slips.

Conclusion:
The Tribunal concluded that the Commissioner (Appeals) erred in relying on newspaper reports and not confining the de-novo proceedings to the parameters set by the remand order. The burden of proof lay with the respondent to provide credible evidence of receipt of goods, which was not satisfactorily met. Consequently, the Tribunal set aside the order of the Commissioner (Appeals) and restored the order-in-original passed by the Assistant Commissioner, thereby allowing the Revenue's appeals.

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