2017 (4) TMI 432 - AT - Central Excise

CENVAT credit - fake invoices - it is alleged that the appellant has not received the goods physically and have received only the invoices on the strength of the appellant taken the cenvat credit - Held that - the invoices issued by the dealer shows the address of the manufacturer supplier who has not been investigated at all. Moreover, the transporter vehicle number is also mentioned on the invoices but either transporter is found non existence or transporter did not come forward for verifying the facts. The Revenue has not made any effort to find out the transporter and to ascertain the true facts whether the goods have been transported to the appellant or not. In the absence of any corroborative evidence in support of the statement made by the supplier (dealer), the cenvat credit cannot be denied to the appellant in the light of the decision in the case M/s ANG Metal Recycling Pvt. Ltd. 2016 (6) TMI 271 - CESTAT CHANDIGARH - as no corroborative evidence produced by the Revenue, therefore, the cenvat credit cannot be denied to the appellant - appeal allowed - decided in favor of assessee.

Summary

Issues:
Denial of cenvat credit based on supplier's statement and lack of corroborative evidence.

Analysis:
The appellant appealed against the denial of cenvat credit by the authorities below, based on the supplier's statement that only invoices were supplied, not the goods. The appellant claimed to have physically received the goods and made payment through account payee cheque. The appellant argued that without investigation at the end of the manufacturer, supplier, or transporter, cenvat credit cannot be denied. Citing precedents like M/s Juhi Alloys Ltd., M/s Kisko Castings India Ltd., and M/s ANJ Metal Recycling Pvt. Ltd., the appellant contended that lack of corroborative evidence should prevent denial of cenvat credit.

The Revenue reiterated the findings in the impugned orders, maintaining the denial of cenvat credit. After hearing both sides, the Tribunal noted that the appellant had received the goods, made payments, and recorded the goods in their statutory records. The Tribunal highlighted that the invoices showed the manufacturer's address, but no investigation was conducted at the manufacturer's end to verify the goods' supply. The Tribunal emphasized the importance of corroborative evidence and the need to ascertain the truth regarding the transportation of goods to the appellant.

Referring to Rule 9(3) of the Cenvat Credit Rules, 2002, the Tribunal emphasized the requirement for the assessee to ensure that appropriate duty has been paid on the goods for which cenvat credit is claimed. The Tribunal noted that the burden lay on the Revenue to prove that the transaction was merely on paper and that the goods were not received by the appellant. The Tribunal highlighted the relevance of the transporter's statement and the necessity of investigating the manufacturer or supplier to establish the truth.

The Tribunal distinguished the case laws cited by the Revenue, stating that they were not applicable to the current case where the appellant was a registered dealer and had produced invoices and supporting evidence. The Tribunal concluded that the charge that the appellant had not received the goods was unsustainable, emphasizing the importance of material evidence on record.

In light of previous decisions and the lack of corroborative evidence from the Revenue, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellant.