M/S.Aar Aar Technoplast Pvt. Ltd vs Cce, Delhi-Iv, Faridabad

[Arising out of Order-in-Appeal No25-26/CE/APPL/dlh-iv/2013 dated 08.04.2013 passed by the Commissioner of Central Excise (Appeals), Delhi-IV, Faridabad]

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?

_________________________________________________

Manoranjan Singh Duggal, President of

M/s.Aar Aar Technoplast Pvt. Ltd. Appellant

Vs.

CCE, Delhi-IV, Faridabad  Respondent

Present for the Appellant : Shri. R.P.Jindal, Consultat

Present for the Respondent: Shri G.R. Singh (DR)

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 14.05.2015

FINAL ORDER NO. 52247-52248/2015

PER: S.K. MOHANTY

Both these appeals have been filed against the impugned order dated 08.04.2014 passed by the Commissioner (Appeals), wherein duty demand and penalty confirmed in the adjudication order were upheld.

2. The reason for confirmation of the cenvat demand and imposition of penalty are that M/s.Aar Aar Technoplast Pvt. Ltd. has availed cenvat credit of Rs.1,95,970/- on the basis of invoices without receiving the goods in the factory. The investigation conducted in this regard by the Department revealed that the first stage dealer M/s. Jagruti Resins Pvt. Ltd. has not supplied the goods to the second stage dealer M/s.Shree Sai International, Faridabad, from whom goods have been purchased by the appellant.

3. Shri.R.P. Jindal, ld. Consultant, appearing for the appellant submits that the goods covered under the disputed invoices have been received in the factory and used in or in relation to manufacture of the final products. To substantiate that the goods have been received and used for the intended purpose, the ld. Consultant submitted the documents such as, payment vouchers, material receipt report, gate entry register etc. before the authorities below. However, no findings have been recorded either by the adjudicating authority or the first appellate authority regarding the documents submitted by the appellant. He further submits that the investigation conducted at the first stage dealers premises, without conducting any investigation at the second stage dealers end, cannot be the reason for disallowance of cenvat credit to the appellant. It is his further submission that the vehicle number indicated in the invoices of the second stage dealer has not been verified by the department to arrive at the conclusion that the goods have not been received in the factory of the appellant.

4. Per-contra, ld. DR Shri G.R. Singh appearing for the respondent reiterates the findings recorded in the impugned order and further submits that investigation conducted by the Department clearly revealed that the vehicle has not been used for transportation of the goods from first stage dealers premises to the second stage dealer. Ld. DR further submits that since the goods have not been supplied by the first stage dealer to the second stage dealer, there is no question of receipt of the goods by the appellant in their factory premises and thus, cenvat credit taken by the appellant is not admissible to them.

5. I have heard the ld. Counsels for both the sides and perused the records.

6. I find that the cenvat credit on the input has been denied to the appellant on the sole ground that the first stage dealer M/s. M/s. Jagruti Resins Pvt. Ltd. had not supplied the goods to the second stage dealer M/s. Shree Sai International, Faridabad, from whom the goods have been purchased by the appellant. I find that the appellants have maintained proper records to prove that the goods have been received in their factory premises. In this regard, the records such as, material receipt register, gate entry register etc., though were produced before the authorities below, but no findings have been recorded regarding such claim of the appellant and also the authenticity of the documents have not been doubted. Further, register maintained by the appellant clearly shows that the amount indicated therein has been paid to the second stage dealer for supply of the goods and that the said payment has been routed through approved banking channel. Denial of cenvat credit on the ground of investigation conducted at the premises of the first stage dealers, cannot be the defensible ground, especially in view of the fact that no investigation has been conducted at the premises of the second stage dealer, from whom the goods have been purchased by the appellant.

7. Since, the Department has not adduced any plausible evidence regarding non-receipt of the disputed goods by the appellant, penalty imposed on Shri Manoranjan Singh Duggal, President of the appellant company is not sustainable under the law.

8. In view of above, I am of the opinion that denial of cenvat credit and imposition of penalties on the appellant are not justified, and thus, the impugned order is set aside and the appeals are allowed in favour of the appellant.

(Dictated and Pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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