2017 (9) TMI 499 - AT - Central Excise

CENVAT credit - duty paying invoices - fake invoices - no movement of goods took place - Held that - the issue is squarely covered by the said ruling of High Court of Allahabad in the case of Commissioner of Central Excise, Customs & Service Tax Versus Juhi Alloys 2014 (1) TMI 1475 - ALLAHABAD HIGH COURT , where the assessee was found to have duly acted with all reasonable diligence in its dealings with the first stage dealer, and credit was allowed. The transactions in respect of inputs in dispute were reflected in the books of account and therefore, the above stated ruling of Hon ble High Court of Allahabad is squarely applicable in the present case - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Disallowance of Cenvat credit amounting to ?97,990.
2. Adjudication through Order-in-Original No. 38/Dem/RBL/2009.
3. Appeal before Id. Commissioner (Appeals) and dismissal.
4. Applicability of the ruling of Hon'ble High Court of Allahabad.
5. Settlement of the issue based on the High Court ruling.
6. Setting aside of Order-in-Original and Order-in-Appeal.

Analysis:
The appeal was against Order-in-Appeal No. 217-CE/LKO/2009 dated 23/11/2009 passed by the Commissioner of Central Excise (Appeals), Lucknow. The appellants were involved in the manufacture of M.S. Ingots and were availing Cenvat credit. They procured M.S. Scrap from a second-stage dealer, M/s Kartikeya Enterprises, Kanpur. A Show Cause Notice was issued to the appellants regarding the alleged fraudulent passing on of Cenvat credit. The issue was adjudicated through Order-in-Original No. 38/Dem/RBL/2009, where the demand was confirmed, and a penalty was imposed. The appeal before the Id. Commissioner (Appeals) resulted in dismissal, leading to the appeal before the Tribunal.

The appellant's counsel argued that the issue was settled by the ruling of the Hon'ble High Court of Allahabad in a specific case. Relevant extracts of ledgers and bill copies were submitted as evidence. The Revenue's representative agreed that the issue was covered by the High Court ruling. The Tribunal considered the facts and the agreement of both parties regarding the applicability of the High Court ruling. The High Court's ruling emphasized that the assessee had taken reasonable steps to ensure the payment of appropriate excise duty on the inputs for which Cenvat credit was claimed. The Court found that the appellant had acted diligently in its dealings with the first-stage dealer, and the transactions were properly recorded.

Based on the High Court ruling and the facts of the case, the Tribunal set aside both the Order-in-Original and the Order-in-Appeal, allowing the appeal. The appellant was entitled to consequential relief as per the law. The judgment concluded with the decision being dictated and pronounced in court.