2015 (10) TMI 1940 - AT - Central Excise

CENVAT Credit - Whether the appellant is entitled to take credit without receiving the inputs. Admittedly in this case, only invoices were moving between manufacturers, registered dealers, etc. without any movement of goods. - Held that - According to sub-rule (5) of Rule 9 of Cenvat Credit Rules, the manufacturer of final products or the provider of output service shall maintain proper records for the receipt, disposal, consumption and inventory of the input and capital goods in which the relevant information recording the value, duty paid, Cenvat credit taken and utilized, the person from whom the input or capital goods have been procured is recorded and the burden of proof regarding admissibility of the Cenvat credit shall lie upon the manufacturer or provider of output service taking such credit. The only way the burden of proof can be discharged is to show that the invoices are in accordance with law, inputs have been received, accounted for and have suffered duty. The appellants are able to show only invoice and nothing else. When the burden of proof is clearly on the assessee and when he fails to discharge the same, there is no other option but to make the assessee to reverse the credit or if the credit is not available, to make the payment. In this view of the matter, we find that appellant has failed to make out prima facie case for waiver. - Partial stay granted.

Summary

Issues Involved:
Entitlement to take credit without receiving inputs.

Analysis:
The only issue in the case revolved around whether the appellant could claim credit without actually receiving the inputs. The tribunal noted that only invoices were being exchanged without any physical movement of goods. The burden of proof regarding the admissibility of the Cenvat credit rested on the manufacturer or service provider taking such credit. The tribunal emphasized the importance of maintaining proper records and proving that the invoices were in compliance with the law, the inputs were received, accounted for, and duty was paid on them. In this case, the appellants failed to provide sufficient evidence beyond invoices to justify the credit claimed, leading the tribunal to rule against them.

Financial Hardship Claim:
The appellant pleaded severe financial hardship, but upon review of the balance sheet and profit & loss account, the tribunal found that the appellant had substantial reserves and surplus, indicating financial stability despite a recent loss. The tribunal rejected the plea of financial hardship based on the available financial information.

Deposit Requirement and Managing Director's Liability:
The tribunal directed the appellant to deposit the entire amount of Cenvat credit with interest within a specified period. Additionally, the Managing Director, who admitted the transactions were for turnover purposes without receipt of goods, was also directed to deposit a specific amount. The tribunal highlighted the Managing Director's responsibility to be aware of legal provisions and not engage in such activities.

Compliance and Stay Order:
Upon compliance with the deposit requirements, the tribunal waived the pre-deposit of balance dues and granted a stay against recovery during the appeal process. The tribunal concluded the order by disposing of the stay applications based on the provided terms.