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2018 (2) TMI 215 - AT - Central ExciseCENVAT credit - non-existent firms - credit denied on the premise that the dealer M/s S.K. Garg & Sons who has supplied the goods to the appellant is non-existence and he has merely issued invoices not the goods - Held that - in the matter in hand no investigation conducted at the end of manufacturer/supplier or the transporter to reveal the truth whether manufacturer/supplier has supplied the goods in question to M/s S.K. Garg & Songs or the transporter has transported the goods to the premises of the appellants which is vital evidence to reveal the truth. Further, M/s S.K. Garg & Sons was registered dealer during the impugned period and all the ST-3 returns were filed by M/s S.K. Garg & Sons which were accepted by the department. Therefore, in the absence of any corroborative evidence to show that the appellants have not received the goods, it cannot be alleged against the appellant that they have received the invoices and not the goods. In the absence of any investigation at the end of manufacturer supplier or the transporter, the cenvat credit cannot be denied to the appellants - appeal allowed - decided in favor of appellant.
Issues:
Denial of cenvat credit on inputs due to non-existence of the dealer M/s S.K. Garg & Sons who supplied the goods. Analysis: The appellants filed an appeal against the denial of cenvat credit on inputs based on the premise that the dealer M/s S.K. Garg & Sons, from whom they procured goods, was non-existent. An investigation revealed that M/s S.K. Garg & Sons had vacated its premises in 2003, and its registration was retrospectively canceled in 2008. The appellants were accused of receiving invoices but not the goods, leading to the denial of cenvat credit, duty demand, interest, and penalty imposition. The appellants contended that they physically received the goods, used them in manufacturing, and cited lack of investigation with the transporter and manufacturer/supplier of the goods. They also highlighted that M/s S.K. Garg & Sons filed ST-3 returns accepted by the department. The Department's representative argued that M/s S.K. Garg & Sons was engaged in issuing fake invoices for cenvat credit availment, as confirmed by a visit where the dealer was found non-existent. The Tribunal noted the absence of crucial investigations at the end of the manufacturer/supplier or transporter to verify the goods' delivery. Despite M/s S.K. Garg & Sons being a registered dealer who filed accepted ST-3 returns, without corroborative evidence showing non-receipt of goods by the appellants, the denial of cenvat credit was deemed unjustified. Referring to a precedent involving M/s Dhawan Steel Industries, the Tribunal emphasized the necessity of tangible evidence over presumptions and assumptions in such cases. It was held that without investigations at the manufacturer/supplier or transporter's end, cenvat credit could not be denied. Relying on this precedent and other similar cases, the impugned order was set aside, and the appeal was allowed with any consequential relief. In conclusion, the Tribunal overturned the denial of cenvat credit on inputs to the appellants due to the lack of substantial evidence proving non-receipt of goods, emphasizing the importance of thorough investigations at the manufacturer/supplier and transporter's end in such cases to justify credit denial.
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