2014 (12) TMI 989 - AT - Central Excise

Cenvat Credit - Bogus Invoices - Non receipt of goods mentioned in invoices - Statement given by job worker - Held that - In the invoices, description of the goods is shown as stainless steel sheets/coil only. There is no specification regarding the grade of the stainless steel sheets/coils. Mere statement given by the supplier does not establish the fact that these stainless steel sheets/coils were of 304, 316 or J4 grade. No test has been conducted of these goods. Further, no enquiry has been made at the end of the supplier regarding the procurement of the stainless steel sheets of 304, 316 or J4 grade. In the absence of any evidence on record, the mere statement of supplier cannot be relied upon. Further the goods were available at the end of the job worker also. No test was conducted to ascertain the quality of steel and merely allegation were made on the basis of marking on the sheets of the figure 200 and presumed that these sheets are of 200 grade only. In these circumstances, where no evidence is available on record and there is no description of the goods regarding the grade of the stainless steel sheets/coil in the invoice, the allegation cannot be made against the respondent that goods were not physically received by the respondent. When there are evidence on record for actual receipt of the goods by the respondent, the ld. Commissioner (Appeals) has rightly set aside the order of adjudication and held that respondent are entitled for Cenvat credit. In these circumstances, I do not find any infirmity in the impugned order, the same is upheld - Decided against Revenue.

Summary

Issues involved:
1. Appeal against the Commissioner (Appeals) order setting aside demand of duty, interest, and penalty.
2. Appeal against dropping penalties by the Commissioner (Appeals) and cross objections filed.
3. Imposition of penalties on the respondents.
4. Allegations of not physically receiving goods covered under invoices for Cenvat credit.
5. Examination of evidence and statements to determine grade and receipt of stainless steel sheets.
6. Evaluation of octroi receipts and vehicle capacity for transporting goods.
7. Consideration of evidence and documents to uphold or dismiss appeals and cross objections.

Issue 1: Appeal against the Commissioner (Appeals) order setting aside demand of duty, interest, and penalty:
The appeal was filed by the revenue on M/s. Samay Exports against the order of the Commissioner (Appeals) that set aside the demand of duty, interest, and penalty. The respondent also filed a cross objection to this appeal. The Tribunal disposed of all appeals by a common order since the issue was common in all cases.

Issue 2: Appeal against dropping penalties by the Commissioner (Appeals) and cross objections filed:
The revenue filed appeals against penalties dropped by the Commissioner (Appeals), with M/s. Samay Exports also filing a cross objection. The Commissioner (Appeals) held that penalties were not imposable as the main charge against the respondent was set aside. Both the revenue and the respondent filed appeals and cross objections against these orders.

Issue 3: Imposition of penalties on the respondents:
The Adjudicating Authority did not impose penalties on some co-noticees. The revenue appealed this decision, arguing that penalties should be imposed. The Tribunal considered the imposition of penalties on the respondents as a crucial issue for resolution.

Issue 4: Allegations of not physically receiving goods covered under invoices for Cenvat credit:
Allegations were made against M/s. Samay Exports for not physically receiving goods as described in the invoices and taking inadmissible Cenvat credit. The investigation revealed discrepancies in the grade and receipt of stainless steel sheets, leading to a show cause notice for denying Cenvat credit, interest, and penalty.

Issue 5: Examination of evidence and statements to determine grade and receipt of stainless steel sheets:
Statements from suppliers and job workers were examined to ascertain the grade and receipt of stainless steel sheets. Discrepancies between the statements and physical evidence raised doubts about the actual receipt of goods, prompting the revenue to appeal for setting aside the order of adjudication.

Issue 6: Evaluation of octroi receipts and vehicle capacity for transporting goods:
The absence of octroi receipts and doubts about the vehicle's capacity to transport goods were raised during the investigation. The respondent's failure to produce some receipts and allegations regarding vehicle capacity were contested, emphasizing the need for proper documentation and evidence.

Issue 7: Consideration of evidence and documents to uphold or dismiss appeals and cross objections:
After hearing arguments from both sides, examining the record, and reviewing the impugned order, the Tribunal upheld the decision of the Commissioner (Appeals). Lack of evidence regarding the grade of stainless steel sheets, absence of specific descriptions in invoices, and discrepancies in allegations led to the dismissal of revenue's appeals and cross objections.

This detailed analysis of the judgment highlights the key issues addressed in the case, the arguments presented by both parties, and the Tribunal's decision based on the evidence and legal considerations.