2016 (9) TMI 932 - AT - Central Excise

Cenvat credit - aluminum profiles, channels, wire rods, sheets - not issued for or utilized in the manufacture of the final products - shortages of inputs and wrong availment of Cenvat credit without receiving inputs - whether the conclusions in the impugned order confirming the culpability of the appellant and the allegation that they had wrongly availed credit on goods which were found not issued or utilized in the manufacture of final products are correct or not. Held that - it is seen that the investigations have conclusively proved that the appellants received aluminium scrap in the form of broken scrap, end pieces of sections, wastage of sheet cutting etc; from local dealers and bus body manufacturers, however, the appellants did not actually receive new aluminium pipes, sheets tubes, coils etc. It is also evidenced that the said material received under cenvatable invoices were never used in manufacture of finished goods. The denovo adjudicating authority has made an in depth analysis concerning shortages noticed of aluminium extrusion hollow profiles and aluminium scrap etc. These shortages have been accepted by the appellant; they have made deposit and further Managing Director of the appellant attributed the shortages to mismanagement in the factory. It is seen that the lower authority has after detailed analysis, satisfied himself that the show cause notice allegations are indeed correct. The appellants have not been able to adduce proof to the contrary. In fact in both the two rounds of original adjudication, the two different adjudicating authorities have arrived at the same conclusions and have also confirmed the proposals in the show cause notice. We are also satisfied that the directions of Tribunal in its earlier Remand Order dated has been followed by the denovo adjudicating authority. Therefore, the impugned order does not call for any interference. - Decided against the appellant

Summary

Issues involved:
Alleged wrongful availment of Cenvat credit on goods not utilized in final product manufacture; Confirmation of proposals in show cause notice; Discrepancies in stock position; Allegations of contraventions; Analysis of statements and evidence; Dispute over statutory records and log sheets; Verification of inputs received and utilized; Adjudication based on detailed analysis.

Analysis:
The case involved the appellants, manufacturers of aluminum alloy ingots, who availed Cenvat credit on certain goods but were alleged to have not utilized them in the manufacture of final products. The Department found discrepancies in the stock position and issued a show cause notice proposing the demand of wrongly availed credit. The adjudicating authority confirmed the proposals, leading to appeals and subsequent remand by the Tribunal for further consideration.

During the proceedings, the appellant failed to appear on multiple occasions, leading to the disposal of the matter in their absence. The main grounds of appeal included challenges to the order's reliance on statements and failure to consider statutory records. The Department argued for upholding the adjudicating authority's well-reasoned order confirming the contraventions alleged in the show cause notice.

The key issue revolved around the alleged wrongful availment of Cenvat credit without utilizing the inputs in final product manufacture. The evidence included statements from employees indicating non-receipt and non-use of certain materials, contradicting the availed credit shown in statutory records. The appellant's explanation attributing discrepancies to the actions of former directors and employees was considered.

Detailed discrepancies in stock and production records were highlighted, showing inconsistencies between log sheets and statutory registers. The investigations revealed that certain materials received under invoices were not used in manufacturing finished goods. The denovo adjudicating authority's analysis supported the show cause notice allegations, which the appellants failed to disprove.

Ultimately, the Tribunal upheld the impugned order, concluding that the allegations were substantiated by the evidence and analysis conducted by the authorities. The appeals were deemed meritless, and the orders were dismissed, following the Tribunal's earlier directions in the matter. The decision was pronounced after a thorough examination of the facts and records presented during the proceedings.