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2018 (11) TMI 411 - AT - Central ExciseCENVAT Credit - fake invoices - appellant wrongly availed cenvat credit based on the invoices issued by the dealer without physical received of the inputs in their factory - Held that - Appellant has not contested the said amount and the same has been paid along with interest - demand upheld. CENVAT Credit - denied on the basis of the statement of the transporters and on the ground that EVA were not used in the factory of the appellant - denial of credit also on the ground that the vehicles no. mentioned in the invoice issued by Shilex Chemicals is not capable for transporting the said goods - Held that - The whole of the demand is based on the various statements of the transporters supplier, Shri. Naresh Goyal and one of the employees of the appellant. The statement of Shri. Naresh Goyal is not inculpatory. In fact, he has admitted non-receipt of PVC but he has not admitted that they have not receipt EVA in their factory premises and on account of non-receipt of PVC physically in their factory, the appellant has already conceded, therefore, on the basis of the statement of Shri. Naresh Goyal, the impugned order is not sustainable. Reliability on statements - Held that - The statements of various transporters and Shri. Jayant.K. Viz were never examined in chief, nor offered for cross examination, therefore, the statements on the basis on which cenvat credit sought to be denied are not admissible. The appellants have used these inputs in manufacturing of their final product which have been cleared on payment of duty. These inputs has been procured and paid the payment through banking challans - cenvat credit cannot be denied in the absence of any corroborative evidence. Credit also sought to be denied on the ground that vehicles no. mentioned in the invoices are not capable for transportation of goods up to the factory of the appellants, therefore, the appellants have not received the goods - Held that - As per the GR issued by the transporter vehicles no. is mentioned as MH04AL829 but due to mistake vehicles no. mentioned in the invoices MH04AC829. Admittedly, c stands for car, L stands for lorry, this mistake is apparent on the invoices but on this ground cenvat credit cannot be denied to the appellant - credit allowed. Reliance is placed by Revenue in the photocopies of GRs - Held that - The photocopies of GRs relied upon by the Revenue are not admissible evidence. In that circumstances, the photocopies of GR cannot be relied upon and the copies of GRs produced by the appellant having endorsement on their favour is to be taken as the admissible evidence, as the Revenue has failed to prove contrary to that - credit allowed. Appeal disposed off.
Issues Involved:
1. Denial of Cenvat credit for non-receipt of PVC physically in the factory. 2. Denial of Cenvat credit based on statements of transporters and alleged non-use of EVA in the factory. 3. Denial of Cenvat credit due to incorrect vehicle numbers mentioned in invoices. Issue-wise Detailed Analysis: 1. Denial of Cenvat Credit for Non-receipt of PVC Physically in the Factory: The demand of ?11,78,601/- was confirmed on account of the denial of Cenvat credit for non-receipt of PVC physically in the factory. The appellant did not contest this amount and had already paid it along with interest. Therefore, this demand was confirmed along with interest. 2. Denial of Cenvat Credit Based on Statements of Transporters and Alleged Non-use of EVA in the Factory: The Cenvat credit of ?2,72,64,532/- was denied based on the statements of transporters and the allegation that EVA was not used in the factory. The Tribunal noted that the entire demand was based on various statements that were never examined in chief nor offered for cross-examination. Citing the case of Kuber Tobacco India Ltd., it was held that such statements are not admissible without proper examination and cross-examination. The Tribunal also noted that the inputs were recorded in the books of accounts and used in manufacturing final products cleared on payment of duty. It was emphasized that the Revenue failed to establish that the inputs were not received by the appellant. Therefore, in the absence of proper investigation and corroborative evidence, the denial of Cenvat credit was not sustainable. 3. Denial of Cenvat Credit Due to Incorrect Vehicle Numbers Mentioned in Invoices: The Cenvat credit of ?1,23,65,293/- was denied on the ground that the vehicle numbers mentioned in the invoices were not capable of transporting the goods. The Tribunal found that there were apparent mistakes in the invoices, such as incorrect vehicle numbers, which were not sufficient grounds to deny Cenvat credit. The Tribunal highlighted that the investigation conducted by the Revenue was deficient, as incorrect vehicle numbers were verified. Additionally, the photocopies of GRs (Goods Receipts) relied upon by the Revenue were not admissible evidence as per the principles laid down by the Hon’ble High Court of Punjab and Haryana. The Tribunal held that the photocopies of GRs produced by the appellant, having endorsements in their favor, were to be taken as admissible evidence. Consequently, the denial of Cenvat credit based on incorrect vehicle numbers was not justified. Conclusion: The Tribunal concluded that the impugned orders denying Cenvat credit of ?2,72,64,532/- and ?1,23,65,293/- were not sustainable. The following orders were passed: - Cenvat credit of ?11,78,604/- was denied and recoverable along with interest, which the appellant had already paid. A penalty of 25% of the duty confirmed was imposed. - Cenvat credit of ?3,96,29,825/- was held to be admissible. - No penalty was imposable on the Director of the appellant. The appeals were disposed of in these terms.
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