2020 (3) TMI 148 - AT - Central Excise

CENVAT credit - fake invoices - supply of invoices only without supply of goods - it stands alleged by the Revenue that he was handling day-to-day affairs of M/s Unnati Alloys from whom the inputs were being received by M/s Arya Alloys - case of appellant is that there is no manufacture taking place, and no inputs received hence credit cannot be disallowed - HELD THAT - On being questioned, learned Authroised Representative has not been able to bring out any other evidence on record except the statement of Shri Amit Gupta and the transporters and the allegations of receiving back of cash as against the payments made through banking channels - It is also a fact that the appellant was reflecting the receipt of the inputs in their statutory records. Further, the Revenue has not alleged that the inputs required for making the final product were procured by the appellant from any other source. In the absence of the inputs, it is not possible to manufacture final product, which the appellant have shown to have manufactured and cleared on payment of duty. There are no justifiable reasons to deny the Cenvat credit or to impose penalties upon the appellants - appeal allowed - decided in favor of appellant.

Summary

Issues: Disallowance of Cenvat credit and imposition of penalty based on alleged non-receipt of inputs, validity of investigation and evidence, applicability of earlier Tribunal decisions.

The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Hon'ble M S. Archana Wadhwa, Member (Judicial), pertains to multiple appeals arising from a common order disallowing Cenvat credit of ?6,39,250 to a manufacturing unit and imposing penalties on the directors. The Revenue alleged that the unit was not receiving actual inputs despite payments made through banking channels, based on investigations and statements from individuals involved. The appellant contended that all inputs were duly recorded and used in manufacturing final products cleared after duty payment.

Upon hearing both sides, it was revealed that similar investigations were conducted against other assesses leading to Tribunal orders setting aside denials of Cenvat credit. The Tribunal noted that the Revenue's case relied solely on statements without cross-examination and lacked evidence of cash transactions. All transactions were properly recorded, leading to the Tribunal setting aside the denials. This decision was consistent with other judgments, including those involving Moranl Alloys Pvt. Ltd., Unnati Alloys Pvt. Ltd., Synergy Steel Pvt. Ltd., and Gian Castings Pvt. Ltd.

The Tribunal found that the same investigations and evidence were presented in the present case, with no additional evidence provided by the Revenue. The appellant's statutory records confirmed receipt of inputs necessary for manufacturing final products. Without these inputs, production would not have been possible. Consequently, the Tribunal found no justifiable reasons to deny Cenvat credit or impose penalties, setting aside the impugned order and allowing all appeals with consequential relief.