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2018 (8) TMI 1095 - AT - Central ExciseCENVAT Credit - denial on the premise that the dealer M/s. S.K. Garg & Sons who has supplied the goods to the appellant is non-existence and he has merely issued invoice not the goods - Held that - In the matter in hand no investigation conducted at the end of manufacturer/supplier or the transporter to reveal the truth whether manufacturer/supplier has supplied the goods in question to M/s. S.K. Garg & Sons or the transporter has transported the goods to the premises of the appellants which is vital evidence to reveal the truth. Further, M/s. S.K. Garg & Sons was registered dealer during the impugned period and all the ER-1 returns were filed by M/s. S.K. Garg & Sons which were accepted by the department. In the absence of any corroborative evidence to show that the appellant have not received the goods, it cannot be alleged against the appellant that they have received the invoices and not the goods merely on the ground that there was no storage facility specifically when the landlord made a statement that the godown was let out to the dealer - In the absence of any investigation at the end of manufacturer/supplier or the transporter, the Cenvat credit cannot be denied to the appellant. Appeal allowed - decided in favor of appellant.
Issues:
Cenvat credit denial based on non-existence of supplier M/s. S.K. Garg & Sons. Analysis: The appellant appealed against the denial of Cenvat credit on inputs due to the alleged non-existence of the dealer, M/s. S.K. Garg & Sons, who supplied the goods. Investigations revealed that the premises of M/s. S.K. Garg & Sons were locked, and the godown was non-existent. The registration of M/s. S.K. Garg & Sons was retrospectively canceled, leading to the denial of Cenvat credit to the appellant. A show cause notice was issued, resulting in duty demand, interest, and penalty imposition. The appellant contended that they physically received the goods and used them in manufacturing final goods, thus Cenvat credit should not be denied. The appellant argued that no investigation was conducted with the transporter or the manufacturer/suppliers of the goods. The appellant also cited a relevant decision to support their case. The Departmental Representative opposed the appellant's contentions, stating that investigations confirmed the non-existence of M/s. S.K. Garg & Sons, who allegedly issued fake invoices for Cenvat credit. The Commissioner (Appeals) allowed credit only when goods were received on the same day as the invoice, denying credit if there was a delay. As M/s. S.K. Garg & Sons had no storage capacity, Cenvat credit was rightfully disallowed. After hearing both sides, the Tribunal found that crucial investigations were missing at the supplier or transporter's end to ascertain the truth. M/s. S.K. Garg & Sons had filed returns accepted by the department, and without corroborative evidence showing the appellant did not receive the goods, the denial of Cenvat credit was unjustified. The Tribunal referred to past cases where similar issues were examined. In one instance, the Tribunal dismissed the Revenue's appeal due to lack of tangible evidence supporting the allegations against the respondent. Another case upheld the decision that without investigations at the supplier or transporter's end, Cenvat credit cannot be denied. Relying on these precedents, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief.
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