2018 (11) TMI 11 - AT - Central Excise

CENVAT Credit - inputs - fake invoices - entire case is on the basis of alleged confessional statement of Amit Gupta dated 06.12.2012 and Sanjeev Maggu of Leo Transport dated 06.09.2013 - Held that - The issue herein is squarely covered by the precedent order of this Tribunal, in the case of Multimetals Ltd. & others vs. CCE & ST Udaipur 2018 (5) TMI 818 - CESTAT NEW DELHI , where it was held that Shri Amit Gupta has not been made party in the proceeding. Liability of ₹ 50,000/- under Rule 26(2) of the Central Excise Rules, 2002 has been imposed upon him being the kingpin of the case. The appellants have discharged its onus as required under Rule 9(1) & (5) of CCR, 2004 - Credit cannot be denied - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availing Cenvat Credit on inputs

Analysis:
The case involved an appeal by a company and its director regarding the availing of Cenvat Credit on inputs. The Appellant, a manufacturer of Copper Strip and wire, was alleged to have availed inadmissible Cenvat Credit based on statements from other individuals. The Directorate General of Central Excise Intelligence directed an inquiry, leading to a Show Cause Notice proposing to disallow the credit. The Appellant requested cross-examination of witnesses Amit Gupta and Sanjeev Maggu, but the proceedings concluded without it, violating principles of natural justice. The Ld. Commissioner (Appeals) upheld the decision, leading to the appeal before the Tribunal.

The Appellant argued that the Department's case was solely based on statements without tangible evidence. Witnesses, including Amit Gupta and Sanjeev Maggu, retracted their earlier statements during cross-examination, casting doubt on the allegations. The Appellant contended that the reliance on statements without allowing cross-examination was unjust. The impugned order was challenged for non-compliance with statutory provisions, and the Appellants claimed to have fulfilled their onus under the Cenvat Credit Rules, 2004.

The Tribunal considered the rival contentions and observed that the issue was covered by a precedent order involving similar circumstances. It noted discrepancies in the Department's case, emphasizing the lack of physical verification of stock and absence of cash seizure from the Appellant's premises. The Tribunal highlighted the importance of genuine sales requiring genuine raw material purchases and criticized the Department for not inquiring from the Appellant's customers. The Tribunal found that the Appellants had met their onus under the rules, citing a relevant decision of the Allahabad High Court.

In conclusion, the Tribunal allowed the appeals, setting aside the impugned order and granting consequential relief. The decision emphasized the importance of following due process and ensuring substantial evidence before disallowing Cenvat Credit on inputs.