2016 (11) TMI 1281 - AT - Central Excise

CENVAT credit - forged invoices - Held that - On going through the observation made by this Tribunal, the matter was remanded back to the adjudicating authority for de novo adjudication on the issue. There was no specific direction to the appellants to prove that they have received the goods. In that, circumstance, the argument advanced by the learned AR is not tenable. Further, I find that the statements of the appellants have not been controverted by any cogent evidence. In that circumstance, statements made by the appellants have evidentiary value. Moreover, the crucial statement of the transporter has not been recorded. In these circumstances, if the statement of the transporter would have been recorded the truth may come out to adjudicate the case. In the absence of such crucial; evidence, the benefit of doubt goes in favour of the appellants. In these circumstances, I hold that the credit cannot be denied to manufacture/buyers. Consequently, no penalty is imposable on all the appellants - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against impugned order; Denial of credit to manufacturers/buyers; Imposition of penalties on appellants.

Analysis:
The appellants challenged the impugned order where it was alleged that goods were diverted to a different location. The investigation revealed discrepancies in the transportation of goods, leading to show cause notices being issued to deny credit to manufacturers/buyers and impose penalties on all appellants. The appellants argued that they had received the goods, and no investigation was conducted on the transporters. They cited tribunal decisions to support their case. The AR contended that evidence of actual receipt was lacking, leading to denial of credit by the Commissioner (Appeals).

In a second round of litigation, the matter was remanded for fresh consideration with a specific direction to ascertain the delivery of consignments to the manufacturers. The Tribunal emphasized the need for evidence related to transport of goods, not just claims of receipt. The matter was remitted to the original authority for a comprehensive review.

The Tribunal found that there was no specific direction to prove receipt of goods by the appellants. The statements made by the appellants held evidentiary value as they were not contradicted by substantial evidence. The absence of crucial evidence, such as statements from transporters, led to the benefit of doubt favoring the appellants. Consequently, the credit was not denied to the manufacturers/buyers, and no penalties were imposed on the appellants.

In conclusion, the impugned order was set aside, and the appeals were allowed with any consequential relief. The Tribunal's decision was based on the lack of substantial evidence contradicting the appellants' statements and the absence of crucial transporter statements to ascertain the truth regarding the transportation of goods.