2014 (5) TMI 949 - AT - Central Excise

Denial of CENVAT Credit - confiscation of various capital goods installed - Penalty - Held that - Revenue s entire case is based upon the statements of two deponents of suppliers - apart from the said statement, there is no other evidence on record. Admittedly the appellants have received the capital goods under the cover of invoices issued by the suppliers. The same stand installed in their unit and infact also stand confiscated by the authorities below. The appellants have produced on record the evidence of payment of U P Trade tax as also CST. Further, they have produced material received notes showing that the said material were received by them - there is no evidence on record that the appellant was a party to the non-payment of Central Excise duty by the suppliers. They have followed the procedure correctly and have availed the credit on the basis of invoices issued by the suppliers. The said invoices contain all the particulars required to be mentioned in the invoices and are proper cenvatable invoices - Following decision of Tarsen Polyfab Pvt. Ltd. vs. CCE, NOIDA 2010 (10) TMI 270 - CESTAT, NEW DELHI - Demand is time barred also - Decided in favour of assessee.

Summary

Issues:
1. Denial of Cenvat credit on duty paid for machines received from suppliers.
2. Allegation of suppliers not actually manufacturing goods or paying Central Excise duty.
3. Initiation of proceedings, imposition of penalty, and confiscation of goods.
4. Cross-examination of supplier representatives and evidence presented.
5. Appellant's contention regarding proper invoices and payment of taxes.
6. Revenue's argument based on lack of Central Excise duty payment by suppliers.
7. Tribunal's previous decision in a similar case involving one of the suppliers.

Analysis:
1. The judgment addresses the denial of Cenvat credit to the appellant for duty paid on machines received from suppliers. The investigation revealed that the suppliers were not manufacturing goods or paying Central Excise duty, leading to the disallowance of credit by the authorities.

2. Proceedings were initiated against the appellant, including the imposition of penalties and confiscation of goods, based on the allegation of non-payment of Central Excise duty by the suppliers. The original adjudicating authority's order was challenged, leading to a remand by the Commissioner (Appeals) for cross-examination of supplier representatives.

3. During the fresh adjudication, only one supplier representative was offered for cross-examination, and the demands were confirmed along with penalties and confiscation of goods. The lower authorities' decisions were upheld on appeal, prompting the appellant to challenge the ruling.

4. The appellant argued that they received goods with proper invoices showing Central Excise registration and duty payment. They also highlighted the payment of UP Trade Tax and CST, presenting material receipt notes as evidence of receiving and using the capital goods.

5. The Revenue reiterated its stance that the suppliers did not pay Central Excise duty, justifying the disallowance of credit. The entire case was based on statements from supplier representatives, with no additional evidence presented.

6. The judgment referenced a previous Tribunal decision involving one of the suppliers, emphasizing that the appellant was not involved in non-payment of Central Excise duty. The appellant followed proper procedures and availed credit based on valid invoices, suggesting that any action should be directed towards the suppliers.

7. Additionally, the judgment considered the time frame for availing credit and issuing the show cause notice, concluding that the demand was time-barred. As a result, the impugned orders were set aside, and both appeals were allowed in favor of the appellant.