2017 (12) TMI 1736 - HC - Central Excise

CENVAT credit - Clandestine removal - Granules - appellant was found to have wrong taken cenvat credit on the inputs which were sold and not used in the manufacturing - HELD THAT - Though it is contended on behalf of the appellant that the findings arrived at by the Tribunal suffers the vice of perversity. However, these findings when tested on the anvil of the facts on record cannot be faulted with as would give rise to any substantial question of law. Therefore, no indulgence is caused. Appeal dismissed.

Summary

Issues:
1. Appeal under Section 35G(1) of the Central Excise Act, 1944 against the order of the Central Excise and Service Tax Appellate Tribunal.
2. Allegations of wrongly availing Cenvat credit on polyethylene granules without physical receipt.
3. Clandestine clearance of granules and liability for interest and penalty.
4. Tribunal's decision on demand of Cenvat credit based on certain invoices.
5. Sustaining the demand of Cenvat credit on non-receipt of raw material in the factory.

Analysis:
1. The judgment deals with an appeal under Section 35G(1) of the Central Excise Act, 1944 against an order of the Central Excise and Service Tax Appellate Tribunal. The appellant, engaged in manufacturing Polyethylene sheathing compound, faced allegations of wrongly availing Cenvat credit on polyethylene granules without physical receipt at the factory premises. The investigation revealed discrepancies in the procurement and utilization of raw materials, leading to the issuance of show cause notices.

2. The Commissioner, Central Excise, upheld the demand of Cenvat credit, citing clandestine clearance of granules supported by statements from involved parties. The appellant was found liable for interest under Rule 12 of the Cenvat credit Rules 2002 and penalty under relevant sections of the 1944 Act. The Tribunal, upon appeal, remanded the matter for re-examination due to the repetition of invoices and duplication of demands.

3. Regarding the demand of Cenvat credit on specific quantities of polyethylene granules, the Tribunal observed discrepancies in the evidence presented. The appellant argued against the connection of certain documents with invoices and highlighted the repetition of invoice numbers leading to the denial of Cenvat credit. However, the Tribunal sustained the demand for Cenvat credit on unverified raw material quantities, emphasizing the lack of evidence of receipt and usage in manufacturing.

4. The Tribunal's decision on the demand of Cenvat credit was based on the lack of defense regarding the receipt and utilization of specific quantities of raw material. Despite the appellant's contentions of perversity in the findings, the judgment concluded that the facts on record did not warrant a substantial question of law, resulting in the dismissal of the appeal without costs.

5. In summary, the judgment addresses issues related to the wrongful availing of Cenvat credit, clandestine clearance of raw materials, liability for interest and penalties, and the Tribunal's decision on specific demands of Cenvat credit. The sustained demand for Cenvat credit on unverified raw material quantities highlights the importance of providing concrete evidence to substantiate claims in excise matters.