2016 (11) TMI 1340 - AT - Central Excise

Demand - inputs not received by appellant, hence not eligible for CENVAT credit - Held that - I am of the considered view that the adjudicating authority is required to examine the newspaper report before denial of credit to the appellant. If there is any truth in the newspaper report, the same may be considered as evidence produced by the appellant for receipt of the inputs. Both sides are real liberty to produce the evidence in their favour to reach to real conclusion whether the appellant has received inputs or not. Thereafter, the adjudicating authority shall decide the issue whether the credit be denied in such circumstances or not - The impugned order is set-aside and the matters are remarked back to the adjudicating authority. The adjudicating authority is directed to examine the evidence produced by the appellant and to examine if any further evidence produced by any of the side within 30 days of receipt of this order and thereafter the adjudicating authority shall examine those evidences and pass appropriate within 60 days.

Summary

Issues involved:
Appeal against denial of credit for vehicles used in transportation of goods.

Analysis:
The appellant appealed against the denial of credit for vehicles used in transporting goods, following an investigation prompted by suspicions raised by Revenue regarding the authenticity of the vehicles' registration numbers. The appellant procured inputs from a main manufacturer through a registered dealer for manufacturing final products. The Revenue alleged that the vehicles' registration numbers mentioned in the invoices were fake, leading to the denial of credit on the inputs received. A show cause notice was issued, resulting in the confirmation of duty demand, interest, and penalties imposed on the appellant, registered dealers, and manufacturer buyers. The appeal was focused on the buyers, with the appellant contending that they were bona fide purchasers of inputs duly recorded in statutory records and used for manufacturing final products cleared after duty payment.

The appellant argued that despite the fake vehicle registration numbers on the invoices, they had genuinely received and utilized the goods for manufacturing, supported by payments made in advance to the manufacturer. The appellant highlighted a newspaper report confirming that during the relevant period, the owners of the vehicles had indeed used fake registration numbers to avoid local taxes. The appellant emphasized that no evidence beyond the registration numbers had been presented by Revenue to dispute the receipt and use of the goods. The appellant contended that the lower authorities had failed to consider these crucial aspects, necessitating the setting aside of the impugned order and remanding the matter for a reevaluation.

In response, the Revenue sought a remand to the adjudicating authority, citing a previous remand by the Tribunal in a similar case. The Tribunal, after considering both parties' arguments and relevant case law, concluded that the adjudicating authority must assess the newspaper report as potential evidence of the appellant's receipt of inputs. The Tribunal directed both parties to produce any additional evidence within a specified timeframe for the adjudicating authority's consideration. Consequently, the impugned order was set aside, and the matter was remanded back to the adjudicating authority for a thorough examination of the evidence and a subsequent decision within a specified timeline.

Ultimately, the appeal was disposed of with the direction for the adjudicating authority to reevaluate the evidence and reach a decision on whether the credit should be denied based on the authenticity of the inputs received by the appellant.