2015 (10) TMI 1118 - AT - Central Excise

Denial of CENVAT Credit - Bogus invoices - Invoices without actual receipt of goods - Held that - No investigation was conducted at the end of the appellant. No cross-examination of the persons whose statement has been relied upon to deny the Cenvat credit was afforded to the appellant. Therefore as held by this Tribunal in the case of Arya Fiber 2013 (11) TMI 626 - CESTAT AHMEDABAD I hold that without cross-examination of the persons whose statement has been relied upon by the department to deny the Cenvat credit to the appellants demand is not sustainable. Consequently I hold that appellant has correctly taken the Cenvat credit. Hence impugned order is set aside. Decided in favour of assessee.

Summary

Issues:
Appeal against denial of Cenvat credit based on investigation of goods supplied by a first stage dealer.

Analysis:
The appellant appealed against an order denying Cenvat credit for inputs received from M/s. Gupta Enterprises. The investigation revealed that Gupta Enterprises did not supply goods to the appellant, leading to the denial of credit. The appellant argued that no statement from them was recorded, nor was their premises inspected. The transporters also did not deny transporting goods to the appellant. The appellant contended that without cross-examination of Gupta Enterprises, the demand was not sustainable. The AR supported the denial of credit based on thorough investigation. The Tribunal noted that no investigation was conducted at the appellant's end and no cross-examination was allowed. Citing a previous case, the Tribunal held that without cross-examination of persons relied upon by the department, the demand was not sustainable. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief.