2024 (3) TMI 1171 - AT - Central Excise

CENVAT Credit - received only invoices and no goods - reliability of statements recorded - HELD THAT - Statements of the above persons have been summarised in the SCN. Not one of these persons was questioned about any of the disputed invoices on the strength of which the appellant had taken Cenvat credit. If the department s case is that only specific invoices were supplied without goods the least one expects is to question if it was so. All the statements were general statements and are vague and not one deals with the invoices in dispute. It has also not been disputed that the appellant had recorded the receipt of inputs in its RG-23A Part I and Part II registers. It is also not the dispute that the appellant had paid for the inputs. It is also not in dispute that the appellant had manufactured final products and had cleared them on payment of duty. There is also nothing on record to show that the stock of the inputs and final products in the appellant s premises were taken and any shortage of either inputs or final products was discovered as a result. The entire SCN is based on presumptions and assumptions and the confirmation of demand based on such an SCN cannot be upheld - the impugned order is set aside - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the denial of Cenvat credit to the appellant by the Department based on allegations of receiving only invoices without goods and the imposition of penalties under the Cenvat Credit Rules, 2004.

Details of the Judgment:

Issue 1: Denial of Cenvat Credit
The appellant, M/s. Shri Vinayak Prime Alloys (Pvt.) Ltd., filed an appeal challenging the order-in-appeal dated 04.9.2020 passed by the Commissioner (Appeals), Jaipur, upholding the order-in-original dated 07.01.2019. The Additional Commissioner confirmed the demand of Rs. 71,12,227/- and imposed penalties under CCR, 15 (2) read with Section 11 AC of the Central Excise Act. The appellant manufactured mild steel ingots from scrap and availed Cenvat credit. The show cause notice (SCN) issued by the Department proposed to deny Cenvat credit and recover the amount from the appellant. The appellant denied the allegations in the SCN and requested cross-examination of witnesses, but they did not turn up. The Department's case was based on presumptions and assumptions without concrete evidence that the appellant had received only invoices and not goods.

Issue 2: Lack of Evidence and Presumptions
The Department alleged that the appellant had received only invoices and not goods, leading to the denial of Cenvat credit. However, the statements of various persons recorded by the Department did not specifically address the disputed invoices. The appellant had maintained proper records of inputs received, payments made, manufacturing of final products, and clearance of products. There was no evidence of any shortage of inputs or final products. The Tribunal found that the entire SCN was based on presumptions and assumptions without substantial proof, leading to the setting aside of the impugned order and allowing the appeal in favor of the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with consequential relief, if any, on the basis that the Department's case lacked concrete evidence and was based on presumptions and assumptions.