2019 (3) TMI 761 - AT - Central Excise

CENVAT Credit - denied on the ground that, the owners of the vehicles denied transportation of the goods from the suppliers/manufacturers/dealers to the appellants - Held that - No statements of driver of vehicles have been recorded. it is not brought on record if the material have not been received by the appellant in question, from where they bought the raw materials to manufacture final products which have been cleared on payment of duty. Therefore, in the absence of any cogent evidence corroborating with the statement of owners of vehicles, the credit cannot be denied. CENVAT Credit - denied on the ground that the owners of vehicles were not found at the addresses given in the record of DTO - Held that - No investigation has been conducted with record of transportation of goods. Merely on the ground that if the owners of the vehicle are not located at the addresses where the vehicle is registered cannot be the reason for denial of credit in the absence of any cogent evidence, therefore, the credit of ₹ 13,46,684/- is allowed. CENVAT Credit - denied on the ground that the vehicles were reported to be non-transport vehicles during the impugned period - Held that - There was newspaper report wherein police complaints have been made that the fake registration are used by the transporters and the said issue has been examined by this Tribunal in the case of Setlco Strips Ltd. 2017 (5) TMI 282 - CESTAT CHANDIGARH - credit cannot be denied. CENVAT Credit - denied on the ground that the record of vehicle in the DTO office has been destroyed - Held that - Merely the record of vehicle in the DTO office has been destroyed cannot be reason for denial of credit in the absence of positive evidence or non receipt of the goods by the appellant. CENVAT Credit - credit was denied without verification - Held that - No investigation has been conducted by the investigating officer. Without investigation, it cannot be concluded that the appellant has not received the goods. Therefore, the credit cannot be denied to the appellant. CENVAT credit - denied on the ground that after 1.10.1999, the manufacturer/suppliers/dealers has vacated the godown for storage of goods - Held that - Merely the supplier has vacated the space of storage of the goods in question cannot be reason for denial of credit in the absence of any positive evidence that the dealers have not supplied the goods to the appellant. In fact, the dealer has categorically stated that they have supplied the goods, therefore, the credit is allowed to the appellant. CENVAT Credit - denied on the basis of statement of Shri Baldev Raj Ram Murti, who was called for cross examination during adjudication and stated that they have supplied the goods to the appellant and the statement in cross examination has not been relied upon by the adjudicating authority - Held that - The adjudicating authority has not followed the principles of natural justice to admit the statement made by the witnesses during the course of cross examination and no evidence has been produced by the Revenue to deny the credit. Therefore, the credit cannot be denied. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Denial of credit on inputs based on various grounds such as non-transportation of goods, unavailability of vehicle owners, reported non-transport vehicles, destroyed records, lack of verification, premises vacation by suppliers, and supplier's statement.

Analysis:

1. Non-Transportation of Goods (?11,52,226 credit):
The appellant contested the denial of credit due to owners of vehicles denying transportation of goods. The judge noted the absence of driver statements and lack of evidence supporting the claim that materials were not received by the appellant. Without corroborating evidence, the credit cannot be denied.

2. Unavailability of Vehicle Owners (?13,46,684 credit):
Credit was denied as vehicle owners were not found at registered addresses. The judge highlighted the lack of investigation into transportation records and emphasized that mere unavailability of owners at registered addresses is insufficient grounds for credit denial without cogent evidence.

3. Reported Non-Transport Vehicles (?4,75,539 credit):
Credit denial was based on vehicles being reported as non-transport vehicles. The judge referenced a previous case involving fake registration allegations and emphasized the burden of proof on the appellant. Due to lack of evidence and presence of fake number plate issues, credit denial was deemed unjustified.

4. Destroyed Records (?48,713 credit):
Credit was sought to be denied due to destroyed vehicle records. The judge ruled that destruction of records alone is not sufficient reason for credit denial without positive evidence or proof of non-receipt of goods.

5. Lack of Verification (?7,44,999 credit):
Credit was denied without verification. The judge emphasized the necessity of investigation before concluding non-receipt of goods. Lack of investigation led to the credit being allowed as denial without evidence was unjustified.

6. Premises Vacation by Suppliers (?4,29,233 credit):
Credit denial was based on suppliers vacating premises. The judge highlighted the absence of evidence proving non-supply of goods and ruled in favor of the appellant as the dealer confirmed supplying the goods.

7. Supplier's Statement (?26,954 credit):
Credit denial was based on a supplier's statement during cross-examination. The judge criticized the adjudicating authority for not considering the witness statement and lack of evidence from the Revenue to justify credit denial. The credit was allowed as per principles of natural justice.

In conclusion, the judge found in favor of the appellant, stating that the cenvat credit on the invoices in question was correctly availed. The impugned order was set aside, and the appeal was allowed with any consequential relief.