2017 (10) TMI 1044 - AT - Central Excise

CENVAT credit - fake invoices - allegation has been made out against the appellants on the basis of the statements of the registered/ dealers of the supplier of the goods wherein it has been stated that the registered dealers were issuing the invoices for availment of inadmissible cenvat credit without accompanying the goods - Held that - I gone through the statement of the registered dealers / supplier. In their statements, they never stated that they have not supplied goods to the appellant. The registered of the supplier have been given a general statements that they are indulged in the activity of issuing invoices without accompanying the goods - on the basis of the statements of the registered dealers who has given a general statement, it cannot be alleged that the appellants have not received the goods. Owner of vehicle - Held that - There is no specific instance shown by the scrap dealer that the particular vehicle has been scrapped on the day. Further, the scrap dealer in his statement, has stated that he has seen the receipt of the vehicle and the statement of Shri. Ramesh Chander Gupta (the seller of the vehicle) and signed the statement given by Shri. Ramesh Chander Gupta and the receipt of the vehicle for sale on 14.10.2011, on going through the receipt, I find that there is not signature of Shri Kuldeep Singh. Therefore the statement given by Shri Kuldeep Singh is not admissible but is doubtful to alleged that same has been taken by the Department to implicate the appellants in this case. The statements of seller of the vehicle and the buyer of vehicle cannot be the piece of evidence to implicate the appellant in this case to deny cenvat credit - the cenvat credit cannot be denied to the appellants in the absence of any concrete evidence against the appellants. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of cenvat credit, duty demand, interest, and penalties based on alleged issuance of inadmissible cenvat credit without goods accompanying invoices.

Analysis:
The appellants appealed against an order denying cenvat credit, demanding duty, and imposing penalties due to alleged irregularities in procuring goods from specific suppliers. The investigation revealed discrepancies where invoices were issued without accompanying goods, leading to suspicions regarding cenvat credit availed by the appellants.

Both lower authorities upheld the denial of cenvat credit, duty demand, and penalties. The appellants contested this decision, asserting they had received the goods in question and utilized them in manufacturing excisable goods, duly cleared after payment of duty. They disputed the allegations based on the vehicle number mentioned in the invoices, which was purportedly sold as scrap, thus raising doubts about the actual receipt of goods.

The appellants' counsel argued that discrepancies in the statements of the vehicle owner and the scrap dealer, lack of signatures on crucial documents, and inconsistencies in witness testimonies cast doubt on the allegations. They contended that mere statements without concrete evidence should not lead to the denial of cenvat credit.

In contrast, the Revenue's representative opposed the appellants' claims, citing admissions by the suppliers regarding issuing invoices without accompanying goods. They relied on the vehicle sale transaction details to support the assertion that the appellants did not receive the goods as claimed.

Upon hearing both parties and evaluating the submissions, the judge noted that the allegations were primarily based on statements from the suppliers admitting to issuing invoices without goods. However, these statements did not specifically address whether goods were supplied against the disputed invoices, undermining the case against the appellants.

The judge scrutinized the details of the vehicle sale transaction, highlighting discrepancies in the statements of the vehicle owner and the scrap dealer. The lack of concrete evidence, inconsistencies in signatures, and doubts surrounding the witness testimonies led the judge to conclude that the denial of cenvat credit to the appellants lacked sufficient grounds.

Consequently, the judge set aside the impugned order denying cenvat credit to the appellants, allowing the appeals with any consequential relief. The decision emphasized the importance of concrete evidence and the inadequacy of mere statements in establishing allegations of cenvat credit misuse.