M/S. Chaudhary Steel Traders vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 574/CE/Appl/Chd-II/2012 dated 6/12/2012 passed by Commissioner of Central Excise, (Appeals), Chandigarh ]

For approval and signature:

Honble Mr 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?

M/s. Chaudhary Steel Traders Appellants

Vs.

Commissioner of Central Excise. Respondent

& ST, Ludhiana

Appearance:

Shri Naveen Bindal, Advocate for the Appellants

Shri G R Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 10.6.2015

FINAL ORDER NO. A/51871 /2015-Ex(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order imposing penalty of Rs.50,000/- under Rule 26 of Central Excise Rules, 2002.

2. The facts of the case are that appellant is a 2nd stage dealer. They procured inputs from M/s. Sidh Balak Enterprises, the first stage dealer and availed Cenvat credit of duty paid thereon and sold to manufacturer buyer against duty paid invoice. An investigation was conducted at the end of M/s. Sidh Balak Enterprises in June wherein he has admitted that he was issuing invoices without supplying the goods. On the basis of statement of M/s. Sidh Balak Enterprises, a show cause notice was issued to the appellant to deny Cenvat credit on the invoices issued by M/s. Sidh Balak Enterprises, consequently to demand duty thereon along with interest and for imposition of penalty. Both lower authorities denied the Cenvat credit holding that there was only a paper transaction with M/s. Sidh Balak Enterprises. Consequently, duty was demanded along with interest and penalty was also imposed. Against the said order, the appellant is before me.

3. Learned Counsel for the appellant submits that there was a general submission of M/s. Sidh Balak Enterprises wherein in the case of Bhawani Industries, M/s. Sidh Balak Enterprises has admitted that they have never supplied the goods to the appellant. Learned Counsel further submits that no statement of transporter and the manufacturer supplier of the goods have been recorded to reveal the truth whether the appellant has received the goods or not as shown in the invoices issued by M/s. Sidh Balak Enterprises. Therefore, Cenvat credit cannot be denied.

4. On the other hand, learned AR reiterated the finding of the impugned order.

5. Heard the parties. Considered the submissions.

6. In this case, Cenvat credit sought to be denied on the premise that M/s. Sidh Balak Enterprises has made a statement that they are issuing invoices and not supplying the goods. Therefore, it is a paper transaction. In this case, statement of appellant has not been recorded but the statement of buyer of the appellant is recorded wherein he has admitted that they have received the goods against the invoices issued by M/s. Sidh Balak Enterprises. To contravene to said statement, Revenue was required to find out whether the manufacturer supplier has supplied the said goods or not. Moreover, no investigation was conducted at the end of transporter to ascertain the fact that transporter has transported the goods from manufacturer supplier to deliver the goods to the appellant before me. The show cause notice was not required to be issued on the presumptions and assumptions. There should be corroborative evidence to prove the allegation, as there is no corroborative evidence to prove the allegation against the appellant, therefore, demand confirmed in the impugned order are not sustainable and it cannot be alleged that there was merely a paper transaction on which the appellant has taken the Cenvat credit. In these circumstances, I set aside the impugned order and allow the appeal with consequential relief, if any.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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