2017 (4) TMI 685 - AT - Central Excise

Clandestine removal - principles of natural justice - the allegation made by the department and cenvat demand confirmed against the appellant on the ground of non-receipt of inputs in the factory - Held that - Since onus to prove transportation of goods from the supplier s premises and receipt of the same within the factory for use in the intended purpose have not been satisfactorily discharged the appellant does not make out any case against confirmation of the adjudged demand - appeal dismissed - decided against appellant.

Summary

Issues: Alleged wrongful availment of cenvat credit based on invoices without actual receipt of goods. Violation of principles of natural justice. Reliability of evidence obtained during investigation.

Analysis:
1. The case involves an appeal against an order passed by the Commissioner (Appeals) regarding the alleged wrongful availment of cenvat credit by the appellant. The appellant, engaged in manufacturing Brass and Copper Ingots, was accused of availing cenvat credit based on invoices without actual receipt of goods. The investigation conducted by DGCEI revealed discrepancies in the transportation of goods and raised suspicions about the authenticity of the transactions.

2. The appellant argued that the principles of natural justice were violated as no opportunity for cross-examination of witnesses was granted. Additionally, the appellant contested the reliability of the evidence, particularly the information obtained from the RTO regarding vehicle details. The appellant maintained that the cenvat particulars were duly recorded and furnished in the ER-I returns, challenging the department's allegations of non-receipt of inputs.

3. On the contrary, the respondent, represented by the Ld. DR, supported the findings of the impugned order, emphasizing the thorough verification of documents and statements that led to the confirmation of the cenvat demand. The respondent asserted that the department's actions were lawful and justified based on the evidence gathered during the investigation.

4. After hearing both sides and examining the records, the Tribunal, through Mr. S.K. Mohanty, Member (Judicial), upheld the findings of the lower authorities. The Tribunal noted discrepancies in the statements provided by the appellant and other involved parties, such as the transporter and RTO, regarding the transportation of goods. The Commissioner (Appeals) had concluded that the appellant had taken irregular cenvat credit without physically receiving the goods, based on a thorough analysis of the factual aspects.

5. The Tribunal affirmed the decision of the Commissioner (Appeals), stating that the appellant failed to prove the receipt and utilization of the goods in its factory, as required for cenvat credit. The onus to demonstrate the transportation and receipt of goods was not satisfactorily discharged by the appellant, leading to the dismissal of the appeal. The Tribunal found no fault in the impugned order and upheld the confirmation of the adjudged demand against the appellant.

6. In conclusion, the Tribunal dismissed the appeal, highlighting the importance of substantiating claims of receipt and utilization of goods for availing cenvat credit. The decision emphasized the significance of factual evidence and proper documentation in establishing compliance with tax regulations.