2016 (12) TMI 1378 - AT - Central Excise

CENVAT credit - irregular availment - credit on invoices form certain dealer without receiving the goods - Held that - On the identical facts and under same investigation in many other cases, demands were confirmed. On comparison with these cases disposed of by this Tribunal in particular Amar Ispat Pvt Ltd 2015 (11) TMI 373 - CESTAT MUMBAI , the facts, evidences and modus operandi of the appellants as well as in case of Amar Ispat Pvt Ltd are same therefore this case also can be decided only on the basis of decisions in above referred case - This Tribunal in case of Amar Ispat Pvt Ltd has considered all common facts and evidences and came to conclusion that it was case of fraudulent passing of Cenvat credit without receipt of input by the beneficiary - In the case of Amar Ispat Pvt Ltd decision important fact has been established that all the invoices issued by M/s. Jindal Iron & Steel Co. Ltd were issued in respect of scrap and addressed to the MITC Rolling Mills Pvt Ltd but goods were delivered to Viramgam based parties, are fake and without receipt and supply of the material. Thus appellant have availed fraudulent Cenvat credit. The appellant have availed Cenvat credit fraudulently without receipt of the goods - appeal dismissed - decided against assessee.

Summary

Issues Involved:
1. Fraudulent Cenvat credit availed without receipt of goods.
2. Examination of transport documents and statements of truck owners.
3. Investigation at the supplier's premises.
4. Alleged fictitious commercial bills.
5. Burden of proof on the department.
6. Scope and extent of investigation.
7. Reliance on previous tribunal decisions.
8. Denial of cross-examination.
9. Evidence of transport and receipt of goods.
10. Limitation and fraud.

Detailed Analysis:

1. Fraudulent Cenvat Credit Availed Without Receipt of Goods:
The appellant, M/s. MITC Rolling Mills Pvt Ltd, was accused of availing Cenvat credit fraudulently on invoices issued by M/s. Jindal Iron & Steel Co. Ltd without actually receiving the materials. The investigation revealed that during August to October 2003, the appellant availed Cenvat credit amounting to ?6,55,435/- without receiving the material in their factory. The transporter admitted that the goods were diverted to Viramgam in Gujarat instead of being delivered to the appellant's factory.

2. Examination of Transport Documents and Statements of Truck Owners:
The appellant argued that the transport documents, including "bilties" issued by M/s. Diamond Roadways, were in their name, questioning why M/s. Jindal Iron & Steel Co. Ltd would write their name if the goods were meant for Viramgam. They contended that the adjudicating authority erred in examining the transporters' statements without corroborating material documents. The investigation found discrepancies, as the transporter admitted to diverting the goods to Viramgam.

3. Investigation at the Supplier's Premises:
The appellant claimed that no investigation was conducted at M/s. Jindal Iron & Steel Co. Ltd, where the cause of action originated. They argued that without investigating the supplier's premises, the allegations against them were unfounded and baseless. However, the tribunal found that the modus operandi and evidence from other cases involving the same supplier supported the department's case.

4. Alleged Fictitious Commercial Bills:
The appellant contended that no copies of fictitious commercial bills were placed on record, and no investigation was conducted at the premises of the SSI manufacturers in Viramgam. They argued that it was objectionable to claim that the goods were not received by the appellants without such evidence. The tribunal, however, relied on the established facts and evidence from similar cases.

5. Burden of Proof on the Department:
The appellant argued that the department did not discharge its burden of proof, as no evidence was produced regarding the procurement of market scrap. They claimed that the department's statement that goods were not received was a blanket statement without supporting evidence. The tribunal found that the department had provided substantial evidence, including transport records and statements, to support its case.

6. Scope and Extent of Investigation:
The appellant highlighted that only 14% of the invoices were investigated, arguing that the show cause notice was based on assumptions and presumptions. They claimed that this indicated an attempt to plant a case against them. The tribunal found that the investigation was sufficient and consistent with other similar cases.

7. Reliance on Previous Tribunal Decisions:
The tribunal relied on its previous decisions in similar cases, particularly Amar Ispat Pvt Ltd, where the facts, evidence, and modus operandi were identical. The tribunal concluded that the appellant had availed fraudulent Cenvat credit without receiving the input, following the precedent set in Amar Ispat Pvt Ltd.

8. Denial of Cross-Examination:
The appellant's grievance regarding the denial of cross-examination was addressed by the tribunal, which found that no prejudice was caused to the appellants. The tribunal noted that the appellants did not produce any evidence to contradict the department's claims, and even if the statements of co-noticees were ignored, the demand would still hold good.

9. Evidence of Transport and Receipt of Goods:
The tribunal found that the appellants failed to produce any evidence, such as gate registers, goods receipt notes, or transport documents, to prove that the HR trimmings were transported to and received in their factory. The evidence presented by the department, including transport records and statements, was deemed sufficient to establish that the goods were not received by the appellant.

10. Limitation and Fraud:
The tribunal rejected the appellant's contention on limitation, stating that it was a clear case of fraud. The tribunal upheld the demand and penalty imposed on the main appellant, dismissing the appeal.

Conclusion:
The tribunal upheld the impugned order, confirming the fraudulent availing of Cenvat credit by the appellant without receipt of goods. The appeals were dismissed based on the substantial evidence and consistent findings from previous similar cases. The tribunal emphasized that the burden of proof was adequately discharged by the department, and the denial of cross-examination did not prejudice the appellants' case.