2018 (6) TMI 121 - AT - Central Excise

CENVAT credit denied - activity undertook by the appellant does not amounts to manufacture - Held that - Admittedly these aluminium sheets have been cleared by the appellant on payment of duty. Therefore the duty paid shall amount of reversal of Cenvat Credit. Therefore Cenvat Credit cannot be denied to 49, 05, 525/- - credit allowed. CENVAT credit - denial on the ground that there was abnormal delay in delivery and vehicles not authorized to go outside Chattisgarh and also vehicle number not mentioned in the invoices - Held that - It has not been investigated by the revenue the mode of transportation explained by the transporter as well as the supplier. In that circumstances Cenvat Credit cannot be denied to the appellants - credit allowed. CENVAT credit - denial on the ground that vehicle owner denied having transported the goods - Held that - The cross-examination of Shri Dinesh Kumar is not allowed. Moreover he was not driving the vehicle and he has given the statement on the basis of his memory since he was not maintaining any records. In that circumstances merely on the basis of presumption and assumption the Cenvat Credit cannot be denied. CENAVT credit - denial on the ground that vehicle owner denied having transported the items and vehicles were actually at some other destination - Held that - Merely on the basis of the statements of the Manager and the Managing Director who are not well conversant with the day-to-day working of the transport company Cenvat Credit cannot be denied to the appellant in the absence of any cross-examination thereof. CENVAT credit - denial on the ground that the vehicle is actually a scooter - Held that - The vehicle number which involved in transportation of goods is HR- 29-J-7449 whereas the revenue has investigated the vehicle No.HR-29-J-7949 which never transported the goods. Therefore the case of the Revenue is only on the basis of assumption and presumption - credit cannot be denied. Penalty not imposable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against demand of duty due to denial of Cenvat Credit, imposition of penalties.

Analysis:
1. The appellants contested the denial of Cenvat Credit amounting to ?49,05,525 on aluminium sheets, arguing that though the process did not amount to manufacture, they cleared the goods by paying duty, which should suffice as reversal of Cenvat Credit. Citing a Bombay High Court decision, the Tribunal allowed this Cenvat Credit.

2. Concerning invoices from Bharat Aluminium Co. Ltd., the appellants clarified that goods were first transported to a godown and then to their premises via different vehicles. The denial of Cenvat Credit due to the absence of a specific vehicle number crossing a Toll Naka was deemed insufficient as the Revenue did not investigate the transportation process adequately.

3. In the case of goods from J.P. Engineers, the Tribunal noted that reliance on the vehicle owner's statement without questioning the driver was not conclusive. The denial of Cenvat Credit based on presumptions without proper evidence was deemed unjustified.

4. Regarding invoices from Shiv Shakti Extrusion and Padia Industries Ltd., the Tribunal highlighted discrepancies in the Revenue's reliance on statements from managerial staff of the transporter. The absence of cross-examination and reliance on individuals not directly involved in transportation led to the allowance of Cenvat Credit to the appellants.

5. Lastly, in the matter of goods from G.M. Castings, a discrepancy in vehicle numbers led to the Tribunal rejecting the Revenue's case based on assumptions. As the investigations did not align with the actual vehicle involved in transportation, the denial of Cenvat Credit was deemed unwarranted.

6. Ultimately, the Tribunal found the show-cause notice allegations unsustainable, leading to the setting aside of the impugned order. Consequently, no demand was confirmed against the appellants, and no penalties were imposed, allowing the appeals with any necessary consequential relief.