2019 (5) TMI 1512 - AT - Central Excise

CENVAT Credit - duty paying documents - fake invoices - case of the Revenue is that as Shri Amit Gupta has admitted that he has created fictitious firms to issue Cenvatable invoices without accompanying goods - HELD THAT - On the same investigation, several cases have been adjudicated by this Tribunal and in this case also facts emerges that the supplier of goods as well as the appellants have admitted that they received the goods against the invoices in question which were used in manufacture of final goods which were cleared on payment of duty, now burden cast on the Revenue that if the appellants have not received the goods against the invoices in question that from where the appellants have procured those inputs. In terms of Rule 9(2) of Cenvat Credit Rules, 2004, the appellant has taken proper care to examine the invoice against which they have received the goods. It is not the duty of the appellant to know about the manufacturer of the goods when invoice contains all the details in terms of Rule 9(2) of CENVAT Credit Rules, 2004 - without investigating the allegation non receipt of input by the appellant is not sustainable and benefit of doubt goes in favor of the appellants. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Investigation into fictitious firms issuing cenvatable invoices enabling inadmissible Cenvat credit.
- Admissibility of Cenvat credit for the appellants based on the investigation findings.
- Imposition of duty, interest, and penalties on the appellants.

Analysis:
The judgment by the Appellate Tribunal CESTAT CHANDIGARH, delivered by Member (Judicial) Mr. Ashok Jindal, pertained to two appeals with a common issue and identical facts. The case revolved around an investigation conducted by DGCEI against an individual who admitted to creating fictitious firms issuing cenvatable invoices to enable the availing of inadmissible Cenvat credit. The investigation revealed that the fictitious firms issued invoices to certain enterprises, which were then used by the appellants in the manufacture of their final products. The Revenue contended that since the invoices were issued without accompanying goods, the appellants should not be entitled to avail Cenvat credit on those goods, proposing duty, interest, and penalties. The matter was adjudicated, resulting in the imposition of duty, interest, and penalties, leading the appellants to appeal.

Upon hearing the parties, the Tribunal noted that similar cases from the same investigation had been adjudicated, where it was established that the goods mentioned in the invoices were indeed received by the suppliers and the appellants for the manufacture of final products cleared after payment of duty. The Tribunal emphasized that the burden was on the Revenue to prove that the appellants did not receive the goods mentioned in the invoices, especially when the appellants had complied with Rule 9(2) of the Cenvat Credit Rules, 2004 by examining the invoices. The Tribunal held that without concrete evidence of non-receipt of inputs by the appellants, the allegation was not sustainable. Consequently, the Tribunal set aside the impugned orders, allowed the Cenvat credit to the appellants, and ruled that no penalty was imposable on them.

In conclusion, the appeals were allowed by the Tribunal, providing a detailed analysis of the investigation, admissibility of Cenvat credit, and the burden of proof on the Revenue to establish non-receipt of goods by the appellants against the invoices in question. The judgment highlighted the importance of compliance with Cenvat Credit Rules and upheld the principle of benefit of doubt in favor of the appellants.