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2017 (9) TMI 606 - AT - Central ExciseCENVAT credit - ingots purchased from a dealer - duty paying documents - Held that - In the ordinary course of circumstances, where a proper invoice is produced and proof of payment along with gate register and Form 4 is presented the receipt of the goods is not challenged by the revenue - In the instant case, The appellant have not produced any document whatsoever like gate register, LR, Transport document or any other regarding in terms of Rule 9(5) to establish that the goods were indeed receipt in the factory and used in the manufacture of finished goods. In such circumstances, revenue has every right to question the actual receipt of goods and in terms of Rule 9(5) of CCR, the burden of proof regarding admissibility lies on the manufacturer - appeal dismissed - decided against appellant.
Issues:
Denial of cenvat credit on ingots purchased from a dealer. Analysis: The appellant, Matsyodari Steel & Alloys Pvt. Ltd., appealed against the denial of cenvat credit on ingots purchased from a dealer. The appellant's counsel argued that they had purchased ingots from a registered dealer and had paid for the imported goods along with duty amount, so the cenvat credit of CVD and cess should not be denied. The counsel highlighted that the supplier of the input had proper central excise registration and issued invoices. However, the Revenue raised doubts about the invoices, alleging that they lacked essential particulars like serial number, time and date of removal, mode of transport, vehicle registration number, rate of duty, LR number, and more. The invoices were also in the name of Sur Logistics instead of the appellant's name. The Revenue contended that the receipt of goods was not established, and as per Rule 9(5) of Cenvat Credit Rules, the burden of proof regarding admissibility of cenvat credit lies on the manufacturer. The Tribunal noted the deficiencies in the documents and the doubts raised by the Revenue regarding the accuracy of the documents. Referring to Rule 9(5) of Cenvat Credit Rules, the Tribunal emphasized that the manufacturer or provider of output service must maintain proper records for receipt, disposal, consumption, and inventory of inputs and capital goods. The burden of proof regarding the admissibility of cenvat credit rests on the manufacturer or service provider taking such credit. The Tribunal observed that in cases where proper invoices, proof of payment, gate register, and Form 4 are provided, the receipt of goods is typically not challenged. However, in this instance, due to various defects in the documents, the Revenue had the right to question the receipt of goods. Since the appellant failed to produce essential documents like gate register, LR, or transport documents to establish the receipt and use of goods in manufacturing finished products, the Tribunal found no merit in the appeal and dismissed it. In conclusion, the Tribunal upheld the denial of cenvat credit on ingots purchased from a dealer by Matsyodari Steel & Alloys Pvt. Ltd. due to deficiencies in the documents and the failure to provide necessary proof of receipt and utilization of the goods in manufacturing processes. The decision was based on Rule 9(5) of Cenvat Credit Rules, placing the burden of proof on the manufacturer to substantiate the admissibility of cenvat credit.
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