2023 (2) TMI 137 - AT - Central Excise

CENVAT Credit - allegation of passing cenvat credit fraudulently without accompanying the goods to various manufacturing units as well as other registered dealers - HELD THAT - The appellant has produced sufficient records in the form of invoices alongwith transport documents and other records showing the receipt of raw-material/input register, RG23A Part-I and also the proof of payment through the banking channel. It is also found in the statement dated 11.08.2016 of Shri Brij Bhusan jain, Accountant of M/s AI and dt. 17.08.2016 of Shri Raj Kumar, Excise in-charge of M/s M/A (copies of which are on record) clearly support the fact that they have actually supplied the goods to the appellant which was used by him in or in relation to the manufacture of the goods. Both the authorities below have not considered the documentary evidence produced by the appellant to prove his case. In LUXMI METAL INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-II 2013 (3) TMI 143 - CESTAT NEW DELHI , it was held that once goods are supplied against proper cenvatable invoice, buyer cannot go beyond that and verify whether registered dealer had purchased the goods legally. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against order of Commissioner (Appeals) dismissing appeal and upholding original order.
- Allegations of passing cenvat credit fraudulently without accompanying goods.
- Appellant's submission of evidence of receipt of inputs and proper utilization in manufacturing.
- Disagreement on reliance on third-party statements by authorities.
- Invocation of extended period of limitation without evidence.
- Appellant's argument based on legal precedents supporting cenvat credit eligibility.
- Failure of authorities to consider documentary evidence provided by the appellant.
- Applicability of legal principles from previous judgments to the current case.

Analysis:
The appeal before the Appellate Tribunal CESTAT Chandigarh challenged the order of the Commissioner (Appeals) dismissing the appellant's appeal and upholding the original order regarding allegations of passing cenvat credit fraudulently without accompanying goods. The appellant, engaged in manufacturing automobile parts, availed cenvat credit under the Cenvat Credit Rules, 2004. The appellant provided evidence of receipt of inputs and their utilization in manufacturing, including invoices and payment records. The appellant argued that reliance on third-party statements by authorities was incorrect and invoked legal precedents supporting cenvat credit eligibility based on proper documentation and payment methods.

The appellant contended that the lower authorities wrongly invoked the extended period of limitation without concrete evidence of suppression of facts or misstatements. The Tribunal noted that the appellant had produced invoices, transport documents, input registers, and proof of payment through banking channels. The Tribunal highlighted that documentary evidence, including statements from suppliers, supported the appellant's case. The Tribunal referenced legal principles from previous judgments, such as the Hind Alloys case and Luxmi Metal Industries case, to support the appellant's eligibility for cenvat credit based on proper invoicing and procurement of inputs.

Ultimately, the Tribunal found that the impugned order was not sustainable in law as the authorities had failed to consider the appellant's documentary evidence adequately. Citing a previous Tribunal decision in a similar matter, the Tribunal allowed the appeal, setting aside the impugned order and granting relief to the appellant. The judgment emphasized the importance of proper documentation and adherence to legal principles in determining cenvat credit eligibility, leading to a favorable outcome for the appellant.