2018 (2) TMI 1018 - AT - Central Excise

CENVAT credit - it was alleged that appellant had wrongly availed Cenvat credit on the basis of invoices, without actual receipt of the goods in its factory - Held that - except the statements of third party i.e. transporters and the Custom House Agent, the department has not brought any other evidence to substantiate its claim that the goods were not received in the factory of the appellant and Cenvat credit was availed based on the invoices only. Further, though the transporters were called for cross-examination on different dates, but they could not present themselves before the adjudicating authority. Thus, the statement recorded from those transporters cannot be used in isolation for deciding the case against the appellant. Tribunal in the case of M/s Kamdhenu Ispat Ltd. 2017 (9) TMI 546 - CESTAT NEW DELHI has dealt with identical situation, where the opportunity of cross-examination of the witnesses were not provided to the appellant. Since the onus lies with the department to prove that the Cenvat credit was availed without receiving of the goods has not been satisfactorily discharged, the adjudged demand cannot be confirmed against the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged wrongful availing of Cenvat credit based on invoices without actual receipt of goods.

In this case, the appellant, engaged in manufacturing copper products, availed Cenvat credit on Central Excise duty paid on inputs used in manufacturing. The Department alleged wrongful credit availing based on invoices without actual receipt of goods. Investigation revealed invoices used for credit were not physically received. The Show Cause Notice sought denial of Cenvat credit, leading to an order for recovery and penalties. The Commissioner (Appeals) upheld the demand, prompting the appeal before the Tribunal.

The appellant argued no discrepancies were found in their books, and a statement confirmed receipt and use of goods for manufacturing. The appellant relied on precedents where lack of cross-examination affected witness statements' credibility. The Department contended that statements from transporters, not retracted, supported the denial of credit based on non-receipt of goods.

The Tribunal noted the lack of substantial evidence beyond third-party statements to prove non-receipt of goods. Transporters' statements lacked cross-examination opportunity, mirroring precedents where witness credibility was crucial. As the Department failed to discharge the onus of proving wrongful credit availing, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.