2015 (4) TMI 649 - AT - Central Excise

Demand of duty - Issue of bogus invoices - Denial of CENVAT Credit - Held that - In the case of Juhi Alloys Ltd. (2014 (1) TMI 1475 - ALLAHABAD HIGH COURT), the Hon ble Apex Court has held that when the invoices have been issued by registered dealer, invoices of manufacturer issued in the name of Registered dealer found fake, and manufacturer of the inputs is not in existence. It was held by Hon ble High Court that it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee has duly acted with all reasonable diligence in its dealing with the first stage dealer within the meaning of Rule 9(3) of Cenvat Credit Rules, 2004. Admittedly in this case the allegation has been made against the appellant on the basis of statement given by the manufacturer, dealer / supplier of the goods, but no investigation has been conducted at the end of the appellant. Moreover, there is no discrepancy in the invoices issued to the appellant and all the payments were made through account payee cheque. In these circumstances, I hold that Revenue has failed to prove their case with supporting evidence. In these circumstances, impugned order is set aside. - Decided in favour of assessee.

Summary

Issues:
1. Duty demand based on issuance of invoices without goods delivery.
2. Dispute over Cenvat credit on invoices.
3. Burden of proof on the appellant regarding goods receipt.
4. Lack of corroborative evidence and cross-examination.
5. Applicability of case laws in similar scenarios.

Analysis:
1. The appellant challenged a duty demand due to invoices issued without goods delivery. The investigation revealed invoices issued by suppliers without actual goods delivery, leading to the duty demand.

2. The dispute centered on Cenvat credit related to 9 invoices, with the appellant arguing against duty imposition based on the authenticity of invoices for HR coils and CR sheets. The appellant received physical goods along with invoices and used them in the final product manufacturing.

3. The appellant contended that they received goods physically along with invoices, supported by payments through account payee cheques. Lack of investigation at the appellant's end and absence of cross-examination were highlighted, challenging the duty imposition.

4. The absence of corroborative evidence and cross-examination raised doubts on the duty demand validity. The appellant emphasized the lack of proof that the goods received did not match the invoices, questioning the basis of the demand.

5. Case laws were cited by both parties, with the appellant relying on precedents emphasizing the need for thorough investigation and proof of goods receipt. The tribunal analyzed the cited cases, finding discrepancies in their applicability to the current scenario.

6. Ultimately, the tribunal ruled in favor of the appellant, citing the lack of conclusive evidence and investigation at the appellant's end. The tribunal set aside the impugned order, allowing the appeal with possible consequential relief.

This detailed analysis covers the issues raised in the legal judgment, outlining the arguments presented by both parties and the tribunal's decision based on the evidence and legal precedents cited.