2023 (7) TMI 539 - HC - Central Excise

CENVAT Credit - denial on the ground that the transport vehicles had not entered at Information Collection Centres (ICCs) - ICC records can be termed as corroborative evidence or conclusive evidence to prove non entry of goods in the State of Punjab? - denial also on the basis of statement made by Kamal Gupta son of the owner of M/s Gupta Transporter Company, who had stated that he had never transported any material for LOTC. HELD THAT - The assessee had sought cross-examination of Kamal Gupta, but the same was not granted to the assessee. In that circumstance, the statement made by Kamal Gupta was inconclusive and it could not be relied upon. So far as the demand of Rs. 1,75,350/- is concerned, it has been observed that the said demand had been confirmed on the basis of statement made by G.C. Arya of M/s APPL. However, no cross-examination of G.C. Arya was granted to the assessee. Therefore, statement made by G.C. Arya had no relevance to deny Cenvat credit to the assessee. With these observations, demand of Rs. 1,75,350/- was set aside. However, demand of Rs. 1,01,048/- was confirmed on the ground that the vehicle, which had been mentioned in the invoices were not capable of transportation of goods in question, as the same were not tankers - Learned counsel for the appellant has not been able to dispute the fact that the certificate was issued by the Excise and Taxation Officer, certifying that the assessee had received the material on each and every one of the disputed invoices. Once, such certificate had been issued, the benefit of Cenvat Credit cannot be denied to the assessee-respondent. The observations made by the adjudicating authority establishes that as per the investigation carried out by the CBI, the respondent had actually manufactured the goods and their export was genuine. Therefore, the respondent-assessee was entitled to claim Cenvat credit on the inputs of goods. Thus, no ground is made out to interfere in the impugned order as the same has been passed after appreciating the evidence in the right perspective. No substantial question of law arises for consideration in this appeal - appeal dismissed.

Summary

Issues:
- Appeal under Section 35 (G) of the Central Excise Act, 1994 against the order of the Customs, Excise and Service Tax Appellate Tribunal.
- Allegations of availing Cenvat Credit without actual receipt of inputs.
- Seizure of unaccounted goods worth Rs. 58.11 Lakhs.
- Show cause notices issued based on search and documents seized.
- Confirmation and reduction of demand by the adjudicating authority.
- Appeals filed by both revenue-department and assessee before the Tribunal.
- Tribunal's order reducing demand and dismissing department's appeal.
- Challenge by revenue-department against the Tribunal's order.
- Production of certificate by the assessee regarding disputed invoices.
- Denial of Cenvat credit based on transport vehicles not entering ICCs.
- Denial of Cenvat credit based on statements without cross-examination.
- Observations by the adjudicating authority regarding circumstantial evidence.
- Entitlement of the assessee to claim Cenvat credit on inputs.

Analysis:
The case involves an appeal under Section 35 (G) of the Central Excise Act, 1994, challenging the final order of the Customs, Excise and Service Tax Appellate Tribunal. The respondent, a forging unit, was accused of availing Cenvat Credit without actual receipt of inputs, leading to the seizure of unaccounted goods worth Rs. 58.11 Lakhs. Show cause notices were issued based on searches and seized documents, resulting in the adjudicating authority confirming and reducing the demand. Both the revenue-department and the assessee appealed to the Tribunal, which reduced the demand but dismissed the department's appeal, prompting the department to challenge the Tribunal's order.

The Tribunal noted that the assessee produced a certificate from the Excise and Taxation Officer certifying receipt of material on disputed invoices, which remained unchallenged by the department. The Tribunal found that the denial of Cenvat credit was primarily due to transport vehicles not entering Information Collection Centres (ICCs). Regarding specific denials of Cenvat credit based on statements without cross-examination, the Tribunal found them inconclusive and set aside certain demands. The Tribunal confirmed a reduced demand based on the type of vehicles mentioned in the invoices.

The appellant failed to dispute the certificate issued by the Excise and Taxation Officer, crucial for establishing receipt of material. The adjudicating authority's observations highlighted circumstantial evidence supporting the assessee's claim for Cenvat credit on inputs. The investigation by the CBI confirmed the genuineness of manufacturing and export activities, reinforcing the assessee's entitlement to claim Cenvat credit. Consequently, the Court found no grounds to interfere with the Tribunal's order, as it was passed after proper appreciation of evidence. No substantial legal question arose, leading to the dismissal of the appeal.