2019 (2) TMI 399 - AT - Central Excise

Cenvat credit - Held that - Tribunal has in case of M/s Everest Metal Works 2008 (10) TMI 495 - CESTAT, NEW DELHI held that - I do not wish to make comments on the correctness of either of the two orders. If the appellate authority was of the view that the order of the adjudicating authority was not based on cogent evidence, the matter could have been sent for de novo adjudication. The onus to prove that the goods in question were actually received is clearly on the person who claims to have purchased and received the goods. If the person claims some benefit he has to prove the foundational facts. The Commissioner (Appeals) was not correct in fastening the onus on the Department and on the ground that the Department has failed to establish the non-receipt of the goods by the respondent, set aside the order without consequential order of remand. Clearly the Department cannot prove the non-receipt, the assessee has to prove by positive evidence the receipt of goods so as to enable him to take cenvat credit. Since Commissioner has not examined the evidences gathered by the revenue during course of investigation and rendered finding categorical finding in respect of them and the receipt of the goods covered by the said invoice by the respondent, we are without expressing any opinion on the evidences and submissions made by the appellants remand the matter back to Commissioner for reconsideration of entire issue afresh - Appeal allowed by way of remand.

Issues Involved:
1. Denial of CENVAT credit on the grounds of non-receipt of goods.
2. Procedural compliance regarding storage of goods outside factory premises.
3. Evaluation of evidence and statements provided by transporters and drivers.
4. Examination of octroi documents and transport records.
5. Adjudicating authority's approach and findings.

Issue-wise Detailed Analysis:

1. Denial of CENVAT Credit on Grounds of Non-receipt of Goods:
The revenue issued a show cause notice alleging that the respondents took CENVAT credit against invoices issued by M/s Hindustan Copper Limited (HCL) without receiving the goods at their factory in Kandivali. The Commissioner dropped the demand, but the revenue appealed, arguing that the goods were not received by the respondents as evidenced by statements from drivers and transport documents.

2. Procedural Compliance Regarding Storage of Goods Outside Factory Premises:
The respondents claimed that they stored goods in a rented godown at Bhiwandi before transporting them to their factory. However, they did not have permission from the jurisdictional Assistant Commissioner to store CENVAT credit-eligible goods outside the factory, as required under Rule 8 of the CENVAT Credit Rules, 2004.

3. Evaluation of Evidence and Statements Provided by Transporters and Drivers:
The revenue's case was supported by statements from drivers and transporters, who claimed that the goods were delivered to locations other than the respondents' factory. The Commissioner discounted these statements, relying instead on octroi documents and the respondents' ledger of payments to transporters. The revenue argued that the Commissioner failed to properly consider the evidence showing the goods were not received by the respondents.

4. Examination of Octroi Documents and Transport Records:
The respondents provided octroi receipts and Form B documents to prove the receipt of goods. However, the revenue pointed out inconsistencies in these documents and argued that they did not match the details of the invoices. Additionally, transport documents submitted by the respondents were disowned by the purported transporter, further casting doubt on the receipt of goods.

5. Adjudicating Authority's Approach and Findings:
The Commissioner concluded that the respondents had provided sufficient evidence of receiving the goods, despite procedural lapses. The revenue contended that the Commissioner misdirected himself by not thoroughly examining the evidence and by inappropriately applying the concept of "alibi" to negate the guilt. The Tribunal found the Commissioner's approach erroneous, emphasizing that the onus was on the respondents to prove the actual receipt of goods in their factory.

Conclusion and Remand:
The Tribunal set aside the Commissioner's order, remanding the matter for reconsideration. The Commissioner was instructed to re-examine the evidence and provide specific findings on the receipt of goods. The appeal by the revenue was allowed, and the respondents were directed to cooperate in the remand proceedings, which should be completed within four months. The cross objections filed by the respondents were disposed of accordingly.

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