2024 (6) TMI 762 - AT - Central Excise

Denial of CENVAT Credit - fake invoices - appellant have not received the inputs and taken credit only on the invoice - HELD THAT - In respect of M/s Gujarat Intrux Limited who is similarly placed as the present appellant, a matter was remanded in GUJARAT INTRUX LIMITED; SHRI DHIRAJ DHARAMSHIBHAI PAMBHAR VERSUS C.C.E. S.T. -RAJKOT 2022 (4) TMI 1615 - CESTAT AHMEDABAD by passing the following order, where it was held that ' the Adjudicating Authority has rejected the retraction for one or other reason. In this case it is necessary for the adjudicating authority to allow the cross examination which is mandated under Section 9 D of Central Excise Act, 1944. By not allowing the cross examination the Learned Adjudicating Authority has violated the principles of natural justice. ' From the above decision, it can be seen that in the aforesaid decision also M/s Gujarat Intrux Limited has taken the Cenvat credit same as in the case of the present appellant and the goods were shown to have manufactured by M/s Suraj and supplied to the appellant through M/s Neo. In both the cases, the charge of the department is the recipient of goods in the present case the appellant have taken Cenvat credit without receipt of goods. This Tribunal has remanded the matter for want of cross-examination of Director and Chairman of M/s Neo and M/s Suraj and also of transporter. The same evidences were used in the present case also - this matter also needs to be reconsidered on the same line of the observation made in the above decision. Appeal allowed by way of remand.

Summary

Issues:
Denial of Cenvat credit due to non-receipt of inputs and reliance on statements for evidence.

Analysis:
The judgment revolves around the denial of Cenvat credit to the appellant on the grounds that they had not received the inputs but only claimed credit based on invoices. The core issue was the alleged non-supply of goods by Manufacturer M/s. Suraj to M/s Neo, which led to the denial of Cenvat credit. The appellant argued that similar cases under the same investigation had been remanded for lack of cross-examination of key witnesses, emphasizing the importance of cross-examination for a fair decision. The appellant contended that the case was built solely on statements of directors and chairmen of involved companies and transporters, whose retractions were not considered. The Adjudicating Authority's refusal to allow cross-examination was deemed a violation of natural justice, as mandated under Section 9 D of the Central Excise Act, 1944. Additionally, the demand for Cenvat credit covered a period beyond five years, raising concerns about the limitation period for the demand. The Tribunal found merit in the appellant's arguments, setting aside the impugned orders and remanding the matter for fresh adjudication, stressing the necessity of providing the appellant with a fair opportunity during the re-examination process.

The judgment referenced a previous case involving M/s Gujarat Intrux Limited, where a similar issue of Cenvat credit denial based on non-receipt of goods was addressed. The Tribunal had remanded the matter in that case due to the lack of cross-examination of key witnesses, highlighting the consistency in approach required for cases with similar factual backgrounds. The Tribunal concluded that the reliance on statements without proper cross-examination undermined the principles of natural justice and necessitated a reconsideration of the matter. Therefore, the impugned orders were set aside, and the appeals were allowed for remand to the Adjudicating Authority for a fresh decision, aligning with the principles established in previous similar cases.