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TMI Blog2023 (6) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... verifying the antecedents of the supplier manufacturer. It is well settled law that onus of proof that the Appellant received the capital goods from some other source was squarely on the department which it failed to prove. In the present case, the issue as to whether when a supplier was duly registered with the Central excise department and had paid Central excise duty on the capital goods and cleared the same from his factory and whether Cenvat credit on the same can be denied to the recipient unit - it is already taken note of the findings of the Ld. Commissioner rendered in para7.13 of his order wherein he had held that the capital goods were duly received by the Appellant. Therefore receipt of the capital goods is not in dispute as the department has not reviewed this portion of the order of the Ld. Commissioner which has attained finality. That the Ld. Commissioner has tried to justify denial of Cenvat credit to the Appellant by rendering findings that M/s. Saha Industries was not an assessee of Central Excise manufacturer of excisable goods and had no power to issue central excise invoice on which Cenvat credit could be availed - in the present case the statutory as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt (s) ORDER The present Appeal arises out of Order-in-Original No.59/Commr/Bol/10 dated 05-10-2010 passed by Commissioner of Central Excise, Bolpur wherein he confirmed duty of Rs.1,43,31,998/- under Section 11A(2) of Central Excise Act, 1944 and also imposed penalty under Section 11AC of Central Excise Act, 1944. The period involved is from March 2007, May 2007, September 2007 October 2007. 2. Briefly stated, the facts of the case are that the Appellant is an integrated steel plant. As a part of expansion as well as forward integration, they purchased plant and machinery from one M/s.Saha Industries during the aforementioned period on the strength of duty paid invoices and took Cenvat credit on capital goods. The said M/s.Saha Industries was duly registered with the Central Excise Department and was also registered under the West Bengal Value Added Tax Rules, 2005. 2.1 The Officers of the Anti-Evasion Unit, Central Excise, Kolkata-V Commissionerate visited the premises of M/s.Saha Industries on 3001-2008. Various statements of the proprietor of M/s. Saha Industries were recorded. It was gathered by the officers that the unit of M/s. Saha Industries was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made by the departmental officers as well as from the report of the independent Chartered Engineer, it was established that the premise of registrant for the purpose of excisability had no capacity at all to manufacture the said excisable goods; that it had been established that the goods received by the Appellant were not manufactured by M/s.Saha Industries; that the Appellant did not conduct verification about the manufacturing status of M/s.Saha Industries; that the liability to establish the genuineness of the suppliers to avail Cenvat credit lies with the recipient of goods as per Rule 9 of Cenvat Credit Rules, 2004; that the goods were delivered through a number of transport agencies most of which were found to be non-existent and others, in their statements, categorically denied any transportation of goods on behalf of M/s.Saha Industries. That as per the statement of Shri Jayanta Kumar Saha, there was no mention of manufacture of goods such as graft, guide box, gear box, conveyor system etc that M/s.Saha Industries was not a manufacturer of excisable goods and invoices raised were false invoices and that no goods manufactured by M/s. Saha Industries were ever rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgments of the Hon ble Supreme Court:- a) CCE, Nagpur Vs. Ballarpur Industries Ltd reported in 2007 (215) ELT 489 (SC). b) Caprihans India Ltd Vs. CCE reported in 2015 (325) ELT 632 (SC). c) CCE Cus, Surat Vs. Sun Pharmaceutical Ind. Ltd reported in 2015 (326) ELT 3 (SC). (iv) He argued that in fact it has been acknowledged in para 13.1.3 of the Show Cause Notice that M/s.Saha Industries had issued bogus Central Excise invoices to the Appellant without delivering their manufactured goods physically to facilitate availment of wrong and irregular Cenvat Credit under the guise of excisable goods manufactured in the factory premises of the said M/s. Saha Industries. Once it has been acknowledged that M/s. Saha Industries had manufactured goods, it could not at the same time be alleged that the said manufactured goods had not been supplied to the Appellant unless concrete and positive evidence was brought to this effect. (v) The only contrary finding of the Ld. Commissioner was that the goods received by the Appellant were not manufactured by M/s.Saha Industries. This would mean that the Ld. Commissionerhas not accepted the allegations leveled in the show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as Cenvat credit on materials which he failed to establish to have been received in his factory for manufacture of excisable goods. According to the Ld. Counsel the said deposit of Rs. ten lakh was only for the non receipt of the raw material for the month of Dec. 2007 to Jan. 2008. He also submitted that even according to the Ld. Commissioner himself the raw material was not received by M/s. Saha Industries only in the month of December 2007 and Jan 2008. There is no finding by the Ld. Commissioner that even prior to the said date the raw material was not received by M/s.Saha Industries in order to manufacture the finished goods. (ix) That on the finding of the Ld Commissioner that M/s. Saha Industries had declared themselves to be the manufacturer of motors, electrical stampings etc and as per their self declaration they were not manufacturers of gears, rolls or conveyor systems, he submitted that a detailed statement of Shri Jayanta Kumar Saha was recorded wherein he was not confronted with the 48 invoices under which the Appellant had received the various types of capital goods. Even otherwise, he nowhere stated that they had not supplied any capital goods to the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice and there is no finding by the Ld. Commissioner that the statutory and financial records which were maintained by M/s.Saha Industries were incorrect or false in any manner. Similarly, there is also no allegation in the Show Cause Notice or finding in the impugned order that the financial as well as statutory records maintained by the Appellant were incorrect or false in any manner. In this regard, Ld. Counsel placed reliance upon the law laid down by the Hon ble Supreme Court in the case of Gian Chand Brothers Vs. Rattan Lal Singh reported at MANU/SC/0015/2013 wherein in para 28 of their judgment it has been held that accounts regularly maintained in the course of business are to be taken as correct unless there are strong and sufficient reasons to indicate that they are unreliable. (xiv) That reliance has been placed on the statements of six transporters and some vehicle owners. It was alleged in the show cause notice that some transporters who had transported the goods from M/s. Saha Industries were found to be non-existent, some denied having transported any goods from M/s. Saha Industries but some also stated that they had transported the plant and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices of a manufacturer who was duly registered with the department but could not be found subsequently it could not be said that the credit was availed on the basis of forged documents. It has been held that even if the original document was issued by the supplier of the inputs even by practicing fraud, a holder for valuable consideration unless shown to be a party to a fraud, could not be proceeded with by taking aid of larger period of limitation as indicated in Section 11A(1) of the Act. He therefore prayed for setting aside the impugned order and allowing the appeal. 7. The Ld. Authorized Representative referred to Revenue advanced the following submissions:- (i) The Ld. Authorized Representative referred to various paragraphs of the show cause notice which related to the activities of M/s.Saha Industries. (ii) He drew our attention to para 5 of the show cause notice wherein it was categorically alleged that M/s. Saha Industries had shown an estimated investment of Rs. 5 lacs in land, plant and machinery in their Registration Application and they had given the plan outlay of the factory premises as well, which had a shed measuring 25ft x 12 ft and marked C i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Appellant but the same were not manufactured by M/s. Saha Industries. But we find that the Ld. Commissioner has nowhere observed that the Appellant had actually received the said capital goods from other alternate source. Therefore, the whole case of the department that the transactions with M/s. Saha Industries were fake transactions and the Appellant took credit without receipt of the capital goods or non receipt of the goods clearly falls down. Even in the show cause notice it was alleged that the Appellant had utterly failed to verify the antecedents of the supplier-manufacturer for the purpose of availing of Cenvat credit. This would also mean that the goods were actually received by the Appellant without verifying the antecedents of the supplier manufacturer. It is well settled law that onus of proof that the Appellant received the capital goods from some other source was squarely on the department which it failed to prove On the contrary in the show cause notice sweeping allegations were made that the Appellant had taken Cenvat credit without receipt of the capital goods. In this regard, we have gone through the two judgments of the Hon ble Supreme Court relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that no reliance can be placed on the inquiries directed against some of the transporters the details of which have been given in the preceding paragraphs. We agree with the Ld. Counsel that though there is reference to these inquiries in para 6 to 9.2.6 of the show cause notice but the inquiry reports or the statements of the transporters have not been made part of the relied upon documents. Therefore, no cognizance can be given to the said allegation. Further we hold that the Ld. Commissioner could not have relied upon the said enquiries or statements of the transporters unless the same were made part of the relied upon documents. 9.2 That the Ld. Commissioner has tried to justify denial of Cenvat credit to the Appellant by rendering findings in para 7.22 of his Order that M/s. Saha Industries was not an assessee of Central Excise manufacturer of excisable goods and had no power to issue central excise invoice on which Cenvat credit could be availed. We find these findings of the Ld. Commissioner are beyond the scope of the Show Cause Notice. In fact, we have gone through the Show Cause Notice and find that it has been clearly stated in para 2.1 of the Show Cause No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in 2007 (218) ELT 221 (Tri.-Mumbai) and CCE, Ludhiana Vs. C.L. Engg. Ltd reported in 2012 (279) ELT 262 (Tri.-Del). In both the judgments there was ample evidence against the parties therein. In the case of Ujwal Ispat Pvt Ltd. who was manufacturer of finished goods had claimed that they had undertaken trading of goods but the transporters had denied transporting the goods as also some of the supplies were found to be bogus and others denied having supplied any such goods to the party therein. In the case of C.L. Engg. Ltd the Tribunal had rendered categorical finding that inputs on which Cenvat credit was availed by the party were never transported to their factory on the basis of preponderance of probability. In the present case the officers from Hdqrs. Anti-Evasion Unit, Central Excise, Kolkata-V Commissionerate had duly visited the unit of the Appellant on 02-04-2008. Though they recorded the statement of their Sr. General Manager but the officers chose not to inspect the plant and machinery which was received from M/s. Saha Industries and was lying installed as per the statutory records. 9.5 We have also gone through the two orders of this Tribunal one in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of invoices issued by the manufacturer having Central excise Registration. They have paid the amount by Account Payee Cheques and the machines are in existence in the factory of the appellant. The Tribunal in the case of Sunvik Steels Ltd (cited supra) has allowed the appeal of the assessee in respect of goods supplied by the same supplier. We also find that this issue was also before the Hon ble High Court of Allahabad for consideration in the case of CCEx.,Cus. Service Tax Vs. Juhi Alloys Ltd : 2014 (302) ELT 487 (All.) wherein the Hon ble High Court held as under:- 7 . In the present case, both the Commissioner (Appeals) and the Tribunal have given cogent reasons to indicate that the assessee had taken reasonable steps to ensure that the inputs in respect of which he has taken the Cenvat credit are goods on which the appropriate duty of excise, as indicated in the documents accompanying the goods, has been paid. Admittedly, in the present case, the assessee was a bona fide purchaser of the goods for a price which included the duty element and payment was made by cheque. The assessee had received the inputs which were entered in the statutory records maintained by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed. We find the ratio of the abovementioned judgment of the Hon ble High Court is squarely applicable to the facts of the present case. 7. By respectfully following the aforesaid judgments of the Hon ble High court of Allahabad, we set aside the impugned order and allow the appeal filed by the appellant. 9.6 Similarly in the Appellant s own case being order No.75111/2020 dated 25-10-2019 in para 2 and 3 this Tribunal has held as under:- 2 The appellant, M/s. Jai Balaji Industries Limited, Unit-IV are engaged in the manufacture of Ferro Manganese falling under chapter heading 7202 of the Central Excise Tariff Act, 1985. The department has disputed the cenvat availament by the unit for the period May 2003 to June 2008 on capital goods such as electrical wires, electrical stampings, electrical control panels, switch gear, machines and mechanical appliances and tools etc. A show cause notice dated 0412-2008 has been issued which was confirmed by the Order-in-Original No. 115/Commr/Bol/2009 dated 31-12-2009, wherein a duty of Rs. 3,07,48,020/- was confirmed with equal penalty and a penalty of Rs. 50,000/- was also imposed under Rule 13(1) of Cenvat Credit Rules, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al order No. 75631-75633/2020 dated 19-11-2020 which was passed in the case of Appellant s sister concern M/s. Jai Balaji Industries Ltd Unit-IV. In this case the credit was denied on Lime Coke which was purchased by the Appellant therein through one M/s. Dankuni Steel Ltd. On inquiry the said supplier, M/s. Dankuni Steel Ltd was found to be non-existent. The main reason for denying the credit to the party was that two letters were received by the department one from the Municipal Commissioner and the other from the Postal authorities according to which the said party was not in existence at the said place. This Tribunal after analyzing the entire evidence held that the best evidence would have been for departmental officers to physically visit the place and draw a panchnama after making enquiries from the locality. It has also been held that the department had not denied that the dealer, M/s. Dankuni Steel Ltd was registered with the jurisdictional Central Excise formation. As per extant departmental instructions the premises were required to be physically inspected within 5 days of granting registration. It has to be presumed that these instructions were duly followed. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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