2014 (7) TMI 648 - AT - Central Excise

Denial of CENVAT credit - proof of receipt of inputs - address of transporter were not verified - In one case, the statement of the owner was recorded, wherein he deposed that the goods were not transported by him to the appellants premises - no sufficient evidence to show that the inputs have not been received by the appellants, who have recorded the same entry in RG 23A-I register and have used the same in the manufacture of the final product. - Held that - payment of all the inputs were made by the appellants through cheques and there is neither any allegation nor any evidence on record that the money corresponding to the cheque amount stands flown back to the assessee - Admittedly, the appellants have shown the utilisation of the inputs in the manufacture of their final product, which has to be cleared on payment of duty. As such, admittedly, the appellants required inputs for the manufacture of the final product. Revenue has neither made any allegation nor produced on record any evidence to show that the said requisite inputs were obtained by the appellants from any other alternate source. In this scenario, the Revenue s allegation as regards non-receipt of inputs cannot be upheld in as much as the appellants could not have manufactured their final product in the absence of the final product. It may not be out of place to mention here that the appellant s major supply of the final products are mostly to the public sector undertakings like, HMT, PPL, etc - Decided in favour of assessee.

Summary

Issues:
1. Availment of CENVAT credit based on invoices from a manufacturer.
2. Allegations of non-receipt of inputs and denial of CENVAT credit.
3. Proceedings initiated by Revenue and subsequent appeals.
4. Investigation findings regarding transporters and statements recorded.
5. Lack of evidence against the appellants for non-receipt of inputs.
6. Comparison with a previous case cited by the Departmental Representative.

Analysis:
1. The appellants availed CENVAT credit based on invoices from a manufacturer for HR/CR coils used as raw material. Investigations revealed discrepancies in the transporters' addresses and statements, leading to doubts about the authenticity of services utilized for transporting inputs.

2. Revenue initiated proceedings against the appellants alleging non-receipt of inputs and denial of CENVAT credit. The original adjudicating authority found insufficient evidence to support the allegations, which led to the issuance of a Show Cause Notice.

3. The Commissioner (Appeals) allowed Revenue's appeal against the original order, which was further appealed before the Tribunal. The Tribunal remanded the matter back to the original adjudicating authority for reconsideration.

4. Subsequent investigations and statements recorded did not conclusively prove non-receipt of inputs by the appellants. The authenticity of transporters and the lack of concrete evidence against the appellants raised doubts regarding the allegations.

5. The appellants maintained proper records of input receipt and utilization in their manufacturing process. No evidence was presented to show that the appellants obtained the requisite inputs from any other source, crucial for their final product manufacturing.

6. The Departmental Representative's reliance on a previous case was deemed inappropriate as the circumstances differed significantly. The cited case involved vehicles incapable of transporting the specified material, unlike the present case where no such discrepancy existed.

In conclusion, the Hon'ble Mrs. Archana Wadhwa set aside the impugned order and allowed the appeal in favor of the appellants, highlighting the lack of substantial evidence supporting the allegations of non-receipt of inputs and denial of CENVAT credit.