2018 (1) TMI 354 - AT - Central Excise

CENVAT credit - duty paying invoices - it was alleged that invoices was in respect of HR Trimming issued by Jindal Iron & Steel Co. Ltd. whereas the goods covered under the said invoices transported and delivered to Viramgam Gujarat based parties - Held that - though the invoice in respect of HR Trimming was issue by Jindal Iron & Steel Co. Ltd. on which the appellant availed the cenvat credit but in none of the statements of transporter or boker the name of the present appellant was indicated regarding the diversion of the goods to the Gujarat based parties - The statement of Shri Vshal Bhushan director of the appellant company is exculpatory he has not admitted the non receipt of the goods rather he stated that the appellant company purchased the HR Trimming from JISCO. Unless the evidence against the appellant is brought on record the case of alleged wrong availment of cenvat credit cannot be established. Appellants are legally entitled for cenvat credit on the invoice issued by JISCO - appeal allowed - decided in favor of appellant.

Summary

Issues: Alleged fraudulent cenvat credit availed on invoices, imposition of personal penalty on director, reliance on statements of transporter, broker, and Gujarat based parties, applicability of judgments in similar cases.

In this case, the department alleged that the appellant fraudulently availed cenvat credit on invoices for HR Trimming from Jindal Iron & Steel Co. Ltd., even though the goods were delivered to parties in Gujarat. The investigation by DGCEI relied on statements from various individuals, including the transporter, Gujarat-based buyers, and brokers. Consequently, the cenvat credit was disallowed, and a personal penalty was imposed on the director of the appellant company. The Commissioner (Appeals) upheld the original order, leading to the appeals.

The appellant's counsel argued that the investigation did not specifically implicate the appellant, and the director's statement was exculpatory, indicating payment of transport charges to the transporter. Citing a judgment from the Hon'ble Gujarat High Court, the counsel contended that the charge of wrong cenvat credit availment was not proven against the appellant.

On the other hand, the revenue's representative reiterated the findings of the impugned order and referenced similar cases where the tribunal upheld demands for wrong cenvat credit availment. The tribunal's judgment in the case of Amar Ispat Pvt. Ltd. & Others Vs. Commissioner of Central Excise, Thane-I was highlighted.

Upon careful consideration, the Member (Judicial) observed that the investigation involved multiple assessees under a common probe. Despite the appellant availing cenvat credit on Jindal Iron & Steel Co. Ltd.'s invoice, none of the statements from the transporter or broker implicated the appellant in diverting goods to Gujarat. The director's statement was exculpatory, confirming the purchase of HR Trimming from JISCO. The adjudicating authority accepted the payment of input invoice and transport charges by the appellant. Consequently, the lack of evidence against the appellant led to the conclusion that the alleged wrong cenvat credit availment could not be proven.

Therefore, the Member (Judicial) held that the appellants were legally entitled to the cenvat credit on JISCO's invoice. The impugned order disallowing the credit was set aside, and the appeals were allowed on 27/11/2017.