2024 (6) TMI 372 - AT - Central Excise

Availmant of improper CENVAT credit - input, pig iron - goods not received in the factory - credit availed on the strength of invoices alone without actual receipt of goods into the factory - HELD THAT - There is no dispute regarding the duty-paid character of the inputs. The respondent is a manufacturer of non-alloy ingots, for which pig iron is one of the major inputs. The respondent has transported the inputs procured from IISCO, Burnpur by railway wagons and thereafter, by trucks, to their factory at Durgapur. Verification conducted by the ld. adjudicating authority through the Superintendent, Anti-Evasion, indicates that there was no evidence available on the record to show that the respondent had diverted the said inputs without using the same in their factory for manufacture of the excisable goods. There is no evidence available on record to establish that the goods had not been received into the factory of the respondent - In the absence of any evidence to substantiate the allegation that the respondent has not received the inputs in the factory, the CENVAT Credit availed by the respondent cannot be denied, on the basis of mere assumptions and presumptions. It is observed that the ld. adjudicating authority has given a well-reasoned finding to allow the credit. The Department could not bring in any evidence to contradict the findings of the ld. adjudicating authority. Accordingly, there are no infirmity in the impugned order and hence the impugned order passed by the Ld. Commissioner is upheld. The appeal filed by the Revenue is rejected.

Summary

Issues involved: Allegation of improper availing of CENVAT Credit on pig iron without actual receipt of goods into the factory.

The appeal was filed by the Revenue against the Order-in-Original (De Novo) passed by the Ld. Commissioner of Central Excise and Service Tax, Bolpur Commissionerate. The respondent, a manufacturer of non-alloy ingots, availed CENVAT Credit on pig iron, a major input, procured from IISCO, Burnpur. The department alleged that the respondent had not received the goods in their factory and had availed credit based on invoices alone without actual receipt of goods. Four Show Cause Notices were issued proposing to disallow the CENVAT Credit on pig iron procured from IISCO, Burnpur.

In the initial proceedings, the Ld. Commissioner dropped the proceedings based on a report that lacked evidence of diversion of inputs. The Department appealed to CESTAT Kolkata, which set aside the order and directed a fresh investigation. In the subsequent proceedings, the Ld. Commissioner found no evidence to support the allegation of non-receipt of goods in the factory and dropped the proceedings. The Department appealed against this decision.

The Department contended that proper records were not maintained for receipt of inputs, and the burden of proof lay on the manufacturer to show admissibility of CENVAT Credit. However, the Ld. Commissioner found no evidence to substantiate the allegations and allowed the credit. The Department's appeal was rejected as they failed to provide evidence contradicting the findings of the Ld. Commissioner.