2015 (10) TMI 1358 - AT - Central Excise

Denial of CENVAT Credit - Bogus invoices - Non receipt of physical goods - Held that - Assessee is required to find out while taking Cenvat Credit to ensure that the input on which Cenvat Credit is taken, the relevant document is accompanied by them or not. Admittedly, in this case the appellant is able to produce the invoice against which appellant has availed Cenvat Credit and same has been entered in their RG-23 Register. Therefore, the burden cast on the revenue to prove that this is only a paper transaction and goods have not been received by the appellant at all. To ascertain this fact that appellant has not received the goods, the statement of transporter is very much relevant to find out the truth. Moreover, investigation at the end of manufacturer supplier also reveal the truth whether the manufacture supplier has supplied the goods to the appellant through the registered dealer or not. - appellant has produced invoice on the strength of which they have availed Cenvat Credit and the goods have been entered in their RG-23 register and same has been supported by the weightment slips which were produced by the appellant before the authorities below. When these material evidence are on record then the burden of not receiving the goods by the appellant shifts on the revenue which revenue failed to do so. - charge against the appellant that they have not received goods and it was only the paper transaction is not sustainable. - Decided in favour of assessee.

Summary

Issues:
Appeal against duty demand, interest, and penalty for alleged Cenvat Credit on paper transactions without receiving goods.

Analysis:
1. Investigation and Allegations: The appellant appealed against an order confirming duty demand, interest, and penalty for allegedly taking Cenvat Credit on paper transactions without physically receiving the goods. The investigation revealed discrepancies at M/s. Jai Kara Steel Rolling Mills and M/s. Jyoti Steels, leading to the issuance of a show cause notice.

2. Appellant's Defense: The appellant, a manufacturer buyer, argued that they received goods against invoices from M/s. Jyoti Steels, not M/s. Jai Kara Steel Rolling Mills. They claimed to have paid for the goods via cheques, disputing the sustainability of the demand without further investigation at the transporter or manufacturer's end. Legal precedents were cited to support their case.

3. Revenue's Opposition: The Revenue contended that the first stage dealer issuing the invoice was non-existent, questioning the receipt of goods by the appellant. They highlighted the lack of cooperation from M/s. Jyoti Steels and argued that the burden was on the appellant to prove physical receipt of goods, which they failed to do.

4. Judgment: After hearing both parties and examining the record, it was found that the appellant's Cenvat Credit was denied based on the statements of M/s. Jyoti Steels' proprietor and the appellant's authorized representative. The court noted the absence of investigations at the manufacturer supplier's end and the transporters, emphasizing that M/s. Jyoti Steels was a registered dealer.

5. Rule Interpretation: Rule 9(3) of the Cenvat Credit Rules 2002 was cited, emphasizing the assessee's obligation to ensure that goods for which Cenvat Credit is claimed have appropriate excise duty paid. The appellant produced invoices and maintained RG-23 Register entries, shifting the burden to the Revenue to prove non-receipt of goods.

6. Decision: The court found the charge against the appellant unsustainable, setting aside the impugned order and allowing the appeal with any consequential relief. The judgment highlighted the importance of proper investigation and evidence in Cenvat Credit cases to establish the receipt of goods.

This detailed analysis of the judgment provides insights into the legal proceedings, arguments presented by both parties, relevant legal provisions, and the court's decision in the case.