2017 (1) TMI 90 - AT - Central Excise

Cenvat credit - fake invoices - principles of natural justice - Held that - I find that the ld. Commissioner (Appeals) has recorded as grounds of appeal that the appellant claimed that the inputs carried by the transporters were entered into factory and the description of the same had been duly recorded in the input records. In that event, Commissioner (Appeals) should have given opportunity to the appellant to produce copies of the transport documents. Since, such opportunity was not given by the ld. Commissioner (Appeals) before holding that the appellants did not submit the transport documents, he has violated observance of principles of natural justice. Therefore, the matter is remanded back to ld. Commissioner (Appeals) for De-novo Adjudication of impugned Order-in-Appeal by setting aside the impugned Order-in-Appeal dated 26/11/2009 - appeal allowed by way of remand.

Summary

Issues:
- Recovery of Cenvat credit under Rule 14 of Cenvat Credit Rules, 2004 & Rule 12 of Cenvat Credit Rules, 2002
- Allegations of receiving invoices without receipt of goods
- Appeal against Order-in-Appeal No. 226-227-CE/LKO/2009

Analysis:
The case involved two appeals filed by M/s V.V.S. Alloys Ltd. & Shri Vijay Kumar Agrawal against Order-in-Appeal No. 226-227-CE/LKO/2009 passed by the Commissioner of Central Excise & Customs (Appeals), Lucknow. The appellants were issued a Show Cause Notice proposing recovery of Cenvat credit due to allegations of receiving invoices from suppliers without receiving any goods. The demand was confirmed through Order-in-Original No. 23/DEM/RBL/2009, leading to the appeal before the Commissioner (Appeals), who rejected it. The appellants then approached the Tribunal challenging the Order-in-Appeal No. 226-227-CE/LKO/2009.

During the proceedings, the appellant's counsel argued that the inputs were not received at their factory, despite having transport documents available in the appeal paper book. The Commissioner (Appeals) noted the absence of transport documents but also mentioned the appellant's claim that the inputs were indeed received and recorded in the input records. The Tribunal observed that the Commissioner (Appeals) should have allowed the appellant to produce copies of the transport documents before making a decision. Due to the violation of principles of natural justice, the matter was remanded back to the Commissioner (Appeals) for a fresh adjudication, setting aside the earlier Order-in-Appeal dated 26/11/2009. The appellants were instructed to submit necessary evidence within 45 days for a new decision to be made within another 45 days after giving them an opportunity to present their case. As a result, both appeals were allowed by way of remand.

In conclusion, the Tribunal's decision highlighted the importance of adhering to principles of natural justice and providing the appellant with an opportunity to present relevant evidence before reaching a final judgment.