Kisco Castings India Ltd vs Cce & St, Chandigarh-I
- CitationExcise Appeal No.E/1401/2012 EX. [SM]
Ratio decidendi
The rule this decision rests on
An allegation that the credit-availing buyer obtained cenvat credit on invoices issued without physical supply of goods cannot be sustained on evidence gathered only from the premises of an intermediate or different unit, where the manufacturers from whom the goods were actually sourced were never investigated. Where the buyer's receipt and utilisation of the inputs are undisputed and no discrepancy in receipt of goods is found at the buyer's factory, a demand of cenvat credit founded on the allegation of paper-only transactions has no evidentiary value in the absence of proper investigation of the supplying manufacturers, and cannot be fastened on the buyer.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No.58/CE/CHD-I/2012 dated 19.03.2012 passed by the Commissioner of Central Excise (Appeals), Chandigarh-I]
For approval and signature:
HONBLE MR. S.K. MOHANTY, 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?
Kisco Castings India Ltd. Appellant
Vs.
CCE & ST, Chandigarh-I Respondent
Present for the Appellant : Shri Kamaljeet Singh
Present for the Respondent: Shri R.K. Gupta, D.R.
Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing/Decision: 21.08.2015
FINAL ORDER NO. 54110/2015
PER: S.K. MOHANTY
The brief facts of the case are that the appellant is engaged in the manufacture of Ingots. The appellant avails cenvat credit of central excise duty paid on the inputs used in or in relation to manufacture of the said final product. In the present case, the appellant had purchased certain inputs from M/s. Sidh Balak Enterprises who is a dealer of the excisable goods. The premises of the said dealer was searched by the Central Excise Officers and it was detected that without supplying the goods, the said dealer was only issuing the Central Excise Invoices, which entitled the manufacturer to avail the fraudulent cenvat credit. On such assumption, the Central Excise Department initiated proceedings against the present appellant for denial of the cenvat credit of Rs.1,50,180.00. It has been alleged that there was no physical transaction of any excisable goods, but only paper transaction was made, facilitating availment of cenvat credit. The Department has proceeded on the basis of investigation conducted in the factory of the manufacture of M/s.Jay Aay Alloys Pvt. Ltd. Kala Amb, an Induction Furnace unit in Himachal Pradesh. The Cenvat Credit demand confirmed and penalty imposed in the adjudication order was upheld in the impugned order. Hence the present appeal is before this Tribunal.
3. Shri Kamaljeet Singh, the ld. Advocate for the appellant submits that the Central Excise Department had only investigated into the transactions effected in the factory of M/s.Jay Aay Alloys Pvt. Ltd., whereas the goods in the present case have been purchased by the appellant from the dealer M/s. Sidh Balak Enterprises, who in turn purchased the goods from different manufacturers viz. M/s. Ruby Strips, Jagan Industries Ltd. etc., whose factory premises have not been visited by the Central Excise Officers. It is his submission that since the factory of the supplier of the goods have not been investigated by the Central Excise Officers and utilization of the inputs in the factory of the appellant is not in dispute, denial of cenvat credit benefit and imposition of penalty is highly improper and the same cannot be confirmed as per the requirement of the statute.
4. Per contra Shri R.K. Gupta the ld. D.R. appearing for the respondent reiterates the findings recorded in the impugned order.
5. Heard the ld. Counsels for both the sides and perused the records.
6. It is seen from the available records that the manufacturer of the goods from whom the dealer M/s. Sidh Balak Enterprises has purchased the goods for supply to the appellant herein, were not investigated by the Central Excise officials. Hence, in the absence of any proper investigation to justify the allegation that there was no physical transaction but only paper transaction have been made facilitating the buyer of the goods to avail the cenvat credit has no evidentiary value. Since, no discrepancies have been observed at the factory of the appellant regarding non-receipt of goods, the allegation of only taking fraudulent cenvat credit based on the invoices cannot sustain and as such cenvat demand cannot be fastened against the appellant. Therefore, I do not find any merits in the impugned order, and as such, the same is set aside. The appeal is allowed in favour of the appellant.
(Dictated and pronounced in the open Court)
(S.K. MOHANTY)
MEMBER (JUDICIAL)
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