2019 (3) TMI 518 - AT - Central Excise

CENVAT Credit - input services - GTA Services - it was concluded that M/s Jagruti Resins or Shree Sai International has issued invoices without accompanying the goods therefore the cenvat credit was denied - case of the revenue is that the vehicle numbers mentioned in the invoices either not capable of transportation of goods or not transported the goods - Held that - The invoices were issued by the dealers for transportation of the goods. Therefore on this analysis it cannot be alleged that vehicle No. HR/55/0076 has not transported the goods and is not having the capacity to transport the goods - Credit allowed. CENVAT Credit - credit sought to be denied on the ground that vehicle sold and NOC given by the RTA in 2007 and all the invoices issued after 2007 not transported the goods - Held that - The statement of Shri Rajender Rana owner of the vehicle who stated that he has no transported the goods of M/s Jagruti Resins to M/s Vikas Spool and M/s Sparsh Polychem Bahadurgarh but he has not stated that he has not transported the goods either to Shree Sai International or M/s Dhiman Engineering Corporation. Therefore the said statement is not conclusive proof to hold that Shri Rajender Rana has not transported the goods to M/s Dhiman Engineering Corporation - In the absence of any conclusive proof the benefit of doubt goes in favour of the appellant and moreover the statement recorded in the year 2010 for the transportation of goods during the period 2008 cannot relied upon when the transporter does not maintain records of transportation of their goods - Credit allowed. CENVAT Credit - Held that - The said vehicle was also involved in the case of M/s Sharad Electronics 2015 (3) TMI 1159 - CESTAT NEW DELHI and in the said case this Tribunal with regard to the vehicle No. HR/55H/7767 observed as without having corroborative evidence that vehicle was not used in transportation of the goods the allegation is not sustainable. Consequently the charge of non usage of these vehicle is not sustainable - credit cannot be denied. CENVAT Credit - Penalty - Held that - The two invoices on which no vehicle number has been mentioned and the onus lies on the appellant to prove that goods has been received and through which vehicle they have received the goods which they failed to do so. In that circumstances the cenvat credit of 6, 488/- is denied and the same is recoverable with interest for the intervening period. In the facts and circumstances of the case penalty imposed on the appellant is dropped. Appeal allowed in part.

Summary

Issues:
Appeal against confirmed demand and penalty imposition.

Analysis:
The appellants contested an order confirming demand against M/s Dhiman Engineering Corporation and imposing penalties. The case involved cenvatable invoices issued by M/s Jagruti Resins to M/s Dhiman Engg without accompanying goods, passing on cenvat credit. Further, M/s Shree Sai International also issued cenvatable invoices to M/s Dhiman Engineering Corporation. Allegations suggested invoices were issued without accompanying goods to avail inadmissible credit. The tribunal was tasked to determine if cenvat credit should be denied and penalties imposed. The appellants argued that a previous case involving M/s Jagruti Resins and M/s Sharad Electronics, where cenvat credit was allowed, should set a precedent for this case. The Revenue, however, argued that the period and circumstances differed, justifying the denial of cenvat credit.

Upon reviewing the case records, it was found that the Revenue's contention was based on the alleged incapacity of vehicles to transport goods or the lack of actual transportation. The tribunal examined each vehicle involved separately. For instance, for vehicle HR/55/0076, the denial of cenvat credit was refuted based on the vehicle's capacity and trade practices. Similar analyses were conducted for vehicles HR/55/5287, HR/55H/7767, HR/55C/5022, and HR/38F/3612, with findings supporting the appellants due to insufficient evidence or inconclusive statements. Notably, in cases where vehicle numbers were missing, the appellants failed to prove receipt of goods, leading to the denial of cenvat credit and recovery of a specific amount.

The tribunal also noted the demise of a party during the appeal, resulting in abatement. Ultimately, the tribunal ruled to deny a specific cenvat credit amount, recoverable with interest, while dropping the penalty imposition. The appeals were disposed of accordingly, with the order pronounced on 07.03.2019.