2017 (6) TMI 632 - AT - Central Excise

CENVAT credit - fake invoices - it was alleged that AEPL were claiming CENVAT credit by fraudulent means on the basis of invoices against which no goods were actually received by them - Held that - Bulk of the CENVAT Credit has been availed by AEPL on the basis of the invoices issued by RM. However, RM was required to prove that they have received the goods accompanying the Cenvat Credit invoice which they have failed to establish. Invoice stipulated in Rule 11 of the Central Excise Rules is not only the assessment document but also the transportation document. If the particular statutorily prescribed in the invoice are found to be untrue then the irrebuttable presumption arises about the genuineness of the document and the transaction. CENVAT Credit stands availed by AEPL on the basis of invoices issued by various dealers. In respect of RM, the investigation by Revenue at the end of transporter SSFM has established that no goods moved from Mumbai to RM. The entire supply of RM is shown only to AEPL. Further, most of the vehicles whose numbers are indicated in the invoices of RM have been found to be none existent in the records of transport authorities. Consequently, it is to be held that the particulars given in the invoice regarding the vehicle numbers are untrue which make the entire document as not genuine. The verification with reference to other dealers also have established similar facts with reference to the vehicle numbers. It is very well established that in quasi-judicial proceedings, as in civil cases, the principal to be applied to evaluate the evidence is preponderance of probabilities . The standard is whether the proposition is more likely to be true than not true. The evidence brought on record by the Revenue, leads to the conclusion that no goods from the dealers in Mumbai, Bhiwadi and Delhi were received by AEPL. The credit availed by AEPL on the basis of invoices issued by various dealers is not admissible - appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Fraudulent claim of Cenvat credit by AEPL.
2. Dummy dealership of RM.
3. Non-existent vehicle numbers in transport documents.
4. Admissibility of Cenvat credit based on incomplete or incorrect invoices.
5. Burden of proof regarding receipt of goods and admissibility of Cenvat credit.

Issue-wise Detailed Analysis:

1. Fraudulent claim of Cenvat credit by AEPL:
The Department alleged that AEPL was claiming Cenvat credit fraudulently based on invoices without actual receipt of goods. Investigations revealed that AEPL was purchasing goods from RM, which procured goods from MTI and SSPL, both stockists of M/s Jindal Stainless Steel. The transport documents used were found to be fraudulent, indicating no actual movement of goods.

2. Dummy dealership of RM:
The Department found that RM was a dummy dealer created by Shri Ishwar Singh Choudhary to procure invoices for availing Cenvat credit without receipt of goods. This was substantiated by the fact that RM’s transactions were accompanied by transport documents from SSFM, whose owner admitted to issuing GRs without transporting any goods. Thus, it was concluded that no goods were transported from Mumbai to AEPL, Delhi.

3. Non-existent vehicle numbers in transport documents:
Verification of vehicle numbers mentioned in transport documents revealed many non-existent or scrapped vehicles. This indicated that the goods were not actually transported, and the invoices were fraudulent. Statements from vehicle owners confirmed that no goods were transported to AEPL on the dates mentioned in the invoices.

4. Admissibility of Cenvat credit based on incomplete or incorrect invoices:
The Department argued that Cenvat credit cannot be denied unless the duty-paid nature of the documents is disputed. However, the Tribunal held that invoices with incorrect vehicle numbers or missing details do not qualify as valid documents for availing Cenvat credit. The burden of proof lies on the manufacturer to ensure the authenticity of the documents and the actual receipt of goods.

5. Burden of proof regarding receipt of goods and admissibility of Cenvat credit:
The Tribunal emphasized that the burden of proof regarding the admissibility of Cenvat credit lies on the manufacturer. AEPL failed to provide evidence such as GRNs or gate registers to prove the receipt of goods. The Tribunal concluded that AEPL did not discharge the onus of proving the receipt of goods and the genuineness of the transactions.

Conclusion:
The Tribunal upheld the Department's findings that AEPL availed Cenvat credit fraudulently based on invoices without actual receipt of goods. The appeals were dismissed, and the impugned order was upheld, confirming the recovery of the fraudulently availed Cenvat credit.