C.C.E. & S.T. Rohtak vs M/S. Ridhi Sidhi Alloys Pvt. Ltd

[Arising out of Order-in-Original No. 20-22/SVS/RTK/2014 dated 23.01.2014 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Rohtak].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

C.C.E. & S.T. Rohtak .Appellants

Vs.

M/s. Ridhi Sidhi Alloys Pvt. Ltd. .Respondent

Appearance:

Shri V.P. Batra, DR for the Appellants

Shri K.K. Gupta, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 30.04.2015

FINAL ORDER NO. 51613/2015-EX(SM)

Per Ashok Jindal:

The Revenue is in appeal against the order wherein the Ld. Commissioner (A) has set aside the order of adjudication denying Cenvat Credit to the respondent.

2. The facts of the case are that the respondent procured goods during the period 11.08.2006  20.09.2006 from M/s Jay Shree Enterprises, first stage dealer who ultimately procured the goods from M/s. AIP Industries Ludhiana and some proceedings were initiated against M/s. AIP Industries and a show cause notice was issued to M/s. AIP Industries on 18.06.2009 and thereafter adjudication took place. Then investigation was conducted at the end of first stage dealer M/s Jay Shree Enterprises and consequently at the premises of the respondent. After conducting the investigation a show cause notice dated 07.09.2011 was issued to the respondent as well as M/s Jay Shree Enterprises to deny Cenvat Credit on the allegation that M/s. AIP Industries is not having manufacturing facility of the goods in question. Therefore, M/s. AIP Industries have issued cenvitable invoices to avail inadmissible Cenvat Credit by the respondent without delivering the goods. Both the parties namely respondent and M/s Jay Shree Enterprises contested the issue before the Adjudicating Authority saying that we have physically received the goods and all the payments have been made through account payee cheque. No investigation has been conducted with the transporter of the goods. Therefore, it cannot be alleged that the first stage dealer as well as the respondent have not received the goods. The Adjudicating authority denied the Cenvat Credit and demanded the duty along with interest from the respondent and also imposed penalty on the respondent as well as Shri Satish Garg, Director of the respondent and M/s Jay Shree Enterprises.

3. The said order was challenged before the Ld. Commissioner (A) who after considering the defence taken by the respondent has dropped the charge against the respondent for availing inadmissible Cenvat Credit on the premises of the invoices issued by M/s. AIP Industries. He also dropped the penalties against Shri Satish Garg, Director and M/s Jay Shree Enterprises. The revenue has not challenged order qua Shri Satish Garg and M/s Jay Shree Enterprises is before me. Revenue is in appeal only against the respondent before me.

4. The Ld. AR submits that in this case M/s. AIP Industries is not having the facility of manufacturing of impugned goods. Therefore, question of delivering the goods does not arise and the proceedings against M/s. AIP Industries have been completed at the adjudication stage and it was held that M/s. AIP Industries is not having any manufacturing facility. Therefore, revenue has discharged their burden and now the burden lies on the respondent to prove that they have physically received the goods. To support his contention he relied on the decision in the case of Harsaran Dass Sita Ram Vs. CCE Panchkula-2015 (56) taxmann.com 278 (P&H). Therefore, he submits that Cenvat Credit is not available to the respondent without proving with cogent evidence. He further submits that M/s. AIP Industries appeal has been dismissed by this Tribunal for non compliance of the provision under section 35F of Central Excise Act 1984. He further submits that for appeals against Mr. Satish Garg and M/s Jay Shree Enterprises he wants to seek report from the concerned department whether they have filed the appeal or not.

5. On the other hand Ld. Counsel for the respondent submits that in this case the goods have been procured by the respondent during the period August 2006 to September 2006 whereas an investigation was conducted at the end of M/s. AIP Industries during the period 2009. Moreover, mere allegation against the respondent is that they have received the invoices without accompanying goods. In fact, the supplier of the goods to the respondent M/s Jay Shree Enterprises in its statement has clearly mentioned that they have supplied the goods to the respondent and payment to M/s Jay Shree Enterprises has been made by the respondent through A/c payee cheque only. Moreover, mode of transportation have been mentioned in the invoice. No investigation has been done by the revenue to allege the respondent has not received the goods from M/s Jay Shree Enterprises. As per Rule 9 of Cenvat Credit Rules 2004 the assessee is required to see the name of the manufacturer supplier duty being paid on the goods and same has been transported in proper way to the assessees premises which has not been denied by the Revenue and no other investigation has been conducted by the Revenue and demand has been confirmed by invoking extended period of limitation which is not sustainable. He further submits that Ld. Commissioner (A) has examined the issue in detail and came to the conclusion that allegation against the respondent has not been proved and allowed the Cenvat Credit. Therefore, the impugned order is to be upheld and the case laws relied upon by the Revenue is not applicable to the facts of this case.

6. Heard the parties. Considered the submission.

7. The main allegation of the Revenue is that as M/s. AIP Industries is not having manufacture facility, therefore, Cenvat Credit is not available to the Respondent. To support his contention Ld. AR heavily relied on the decision in the case of Harsaran Dass Sita Ram (Supra). In the said case in earlier round of proceedings after examining the facts of the case this Tribunal came to the conclusion that assessee who is availing Cenvat Credit has to prove that they have received the goods. Therefore, the Tribunal came to the finding that burden of proof in the facts of that case was on the assessee availing Cenvat Credit. Further in second round of litigation it was held that assessee has failed to prove cogent evidence that they have received the goods in their factory and then it was concluded that they are not entitled to take Cenvat Credit. In fact, facts of this case are somewhat different as in the impugned order itself Ld. Commissioner (A) has come to the conclusion that respondent has been able to prove that they have received the goods in their premises. Therefore, the said facts are not applicable to the facts of this case. Further, I have examined the impugned order and in the impugned order Ld. Commissioner (A) has observed as under:

As regrds, appellant no.1 the representative of the appellant during the investigation categorically submitted that they have received the godos along with invoices from appellant no.2 entered them ito their books of records including the gate register, issued for manufacturer of further goods in the factory. Likewise, the appellant no.2 on receipt of the show cause notice filed detailed reply vide their letter dated 03.04.2012 in which they gave complete details about the goods, the mode of transport and also submitted the copies of relevant documents such as consignment notes issued by the transporter, sales tax / vat returns, assessment order from the sales tax department, copies of declaration inform-H and the statements of bank accounts to substantiate their claim that they have received the goods from appellant no.2. All these were verifiable facts. The department has not conducted any investigation whatsoever on the factual statements made by the appellant no.1. They have not been commented upon in the order-in-original neither there is any rebuttal. Therefore, the existences of these documents and the transaction conducted under them have to be accepted. Thus, it cannot be said that the appellant no.1 did not received any goods from appellant no.2. Further, the show cause notice has alleged fraud and invoked extended period for demand. In the entire proceedings no evidence whatsoever has been brought on record about the fact that appellant nos.1 and appellant nos.2 have ever connived and that either of them had any knowledge about the alleged fact that M/s. AIP Industries did not have any manufacturing facilities of nickel plates, the goods which are subject matter of the proceedings. Therefore, extended period in this case not justified. The period involved in this case is August 2006 to October 2006 whereas the show cause notice has been issued on 07.09.2011, the entire demand being beyond a period of one year is therefore, not sustainable.

8. I do agree with the observation made by the Ld. Commissioner (A) as the respondent has made all the payments through account payee cheque to the first stage dealer who has accepted that they have delivered the goods along with invoices. Moreover, no statement of transporter have been recorded to ascertain the fact that respondent has not received the goods. In these circumstances, I do not find any infirmity with the impugned order on merits. Further, I find that in this case show cause notice has been issued in September 2011 whereas transaction involved the period August 2006 to September 2006. Therefore, I hold that show cause notice is barred by limitation also. In these circumstances, impugned order is upheld. Appeal filed by the Revenue is dismissed.

(Dictated and pronounced in the open court.)

(Ashok Jindal) Member (Judicial)

Bhanu

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E/52569/2014-EX(SM)