2023 (10) TMI 1108 - AT - Central Excise

CENVAT Credit - fake invoices - allegation is that the appellants have not received the materials and have taken the cenvat credit without receiving the goods - HELD THAT - Appellants have produced the documents evidencing the transportation of goods to the factory premises from M/s Shree Ganesh Forging Company and the payment of transportation charges were also recorded in the books of accounts. In that circumstances merely alleging that without any evidence that the appellants have not received the goods, the cenvat credit cannot be denied. Moreover, the appellants have produced the documents for transportation of goods and the said goods have been used in their factory for manufacture of final product, which has suffered duty. The cenvat credit on the invoices received in their factory against the invoices issued by M/s Shree Ganesh Forging Company, cannot be denied to them - CENVAT Credit allowed - appeal allowed. The Appellants Nos.(2),(3),(4),(5), (6), (7) (11) have failed to produce any evidence with regard to transportation of goods - the cenvat credit is denied to them, therefore, their appeals are dismissed.

Summary

Issues Involved:
The judgment involves the issue of denial of cenvat credit on invoices issued by a forging company due to alleged non-receipt of goods by the appellants.

Details of the Judgment:

1. Investigation and Shortages:
An investigation was initiated at M/s Shree Ganesh Forging Company, leading to the discovery of shortages in finished goods. The company was found to have cleared goods different from what they were supposed to manufacture, facilitating cenvat credit for buyers through paper transactions.

2. Show-Cause Notices and Representation:
Show-cause notices were issued to the appellants regarding the denial of cenvat credit on the invoices issued by M/s Shree Ganesh Forging Company. Only some of the appellants appeared before the tribunal, while the rest did not respond to notices.

3. Arguments and Evidence:
During the proceedings, the appellants who appeared produced documents showing transportation of goods from the forging company to their units, along with payment records for transportation charges. They contended that the received goods were used in their manufacturing process, justifying the cenvat credit.

4. Revenue's Position:
The Revenue argued that the transactions were merely paper-based to allow appellants to claim cenvat credit without actually receiving the goods, emphasizing the nature of the supplied goods as a basis for denial.

5. Decision and Rationale:
After hearing both parties, the tribunal found merit in the evidence presented by the represented appellants regarding the transportation and utilization of goods in their manufacturing process. Consequently, cenvat credit was allowed for these appellants. However, for the appellants who failed to provide evidence of goods transportation, cenvat credit was denied, leading to the dismissal of their appeals.

6. Final Orders:
The tribunal allowed cenvat credit for Appellant Nos. (1), (8), (9), (10), and (12) based on the evidence presented, while denying it for the rest of the appellants due to lack of supporting documentation. The judgment was pronounced on 12.10.2023.

This summary provides a detailed overview of the judgment, highlighting the key issues, arguments, evidence, and the tribunal's decision for each aspect involved in the case.