M/S. Cords Cable Industries Ltd vs Commissioner Of Central Excise

[Arising out of Order-In- Appeal No. 456(DKV)/CE/JPR-I/2010 dated 7.10.2010 passed by Commissioner of Customs & Central Excise (Appeals), Jaipur]

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. Cords Cable Industries Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Jaipur I

Appearance:

Shri P K Mittal, Advocate for the Appellants

Shri V P Batra, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 26.02.2015

ORDER NO. FO/ A/50652/2015-Ex(SM)

Per Ashok Jindal :

The appellant by way of this appeal has challenge the impugned order denying the Cenvat credit along with interest and imposing penalty on the appellant.

2. Brief facts of the case are that an investigation was conducted at the premises of M/s. Kashish Products Impex Pvt. Ltd. (KPIL) on 14.2.2006. Thereafter various statements were recorded and the factory of the appellant was visited on 23.4.08. Statement of two officials were recorded. Thereafter, a show cause notice was issued to the appellant to deny Cenvat credit for the goods procured from M/s. KPIL during the period April, 2005 to November, 2005 on PVC compound on the premise that M/s. KPIL has stated that they have neither manufactured the goods nor supplied the goods to the appellant and are issuing only invoices to avail Cenvat credit, therefore appellants are not entitled to take Cenvat credit. The adjudication took place and on the basis of statement of supplier of invoices the demand was confirmed against the appellant to deny Cenvat credit on inputs along with interest and equivalent amount of penalty was also imposed. The said order was challenged before learned Commissioner (Appeals) who also confirmed the order of adjudication. Aggrieved from he said order, appellant is before me.

3. Shri P K Mittal, Advocate learned Counsel for the appellant submits that the appellant have physically received the goods and same was stated by the Department officials of the appellant on 23.4.08 at the time of visit of the Department official. He also submits that goods were physically received by them through transporter and there are endorsements on the documents for passing through the goods of check post of the suppliers goods and to the appellant. He submits that all the goods are not only duty paid but sales tax was also paid on them, All the payments of these goods were made through cheque. It is further submitted that as the evidence of passing through check post is entered in the invoice, therefore, it cannot be said that appellant has not received the goods. He therefore, submits that statement of supplier of goods not supplying the goods to the appellant is not correct and opportunity of cross examination of the supplier was not given. In these circumstances, the denial of Cenvat credit is not sustainable. He further submits that in the same investigation in the case of Rajan Engineering Works vs. CCE, Delhi IV, Faridabad [2012 (279) ELT 306 (Tri-Del)], the Cenvat credit sought to be denied to the manufacturer buyer and this Tribunal

appreciated the facts and the manner of investigation and thereafter held that Cenvat credit cannot be denied. Therefore, the learned Counsel prayed that impugned order be set aside.

4. On the other hand, learned AR supported the impugned order and submits that documents were supplied to the appellant. Moreover there is statement of supplier that they have neither manufactured the goods nor supplied the goods, therefore question of receiving of goods by the appellant does not arise.

5. Heard the parties. Considered the submissions.

6. In this case, the allegation against the appellant is that they have not physically received the goods and received only invoices and they have taken the Cenvat credit thereon. This allegation was made against the appellant on the basis of statement of the supplier that is M/s. KPIL which was recorded on 14.2.06 wherein the supplier of the goods has stated that I am not manufacturing the goods. In this case, goods have been procured by the appellant during November, 2004 to April, 2005. From the statement of supplier, it is not coming out that during the period November, 2004 to April, 2005, the manufacturer supplier was not manufacturing the goods. The statement of supplier is vague. Moreover, the appellant was having supporting evidence in the form of check post endorsement, proof of sales tax payment and towards the goods, payment was made through account payee cheque. I also find that at the time of visit of the factory of the appellant, nothing incriminating have been found. If same would have been found, it would have been brought on record, as there is nothing on record, the question arises from where the goods were procured from the appellant for manufacturing excisable goods. When Revenue has alleged that they have not received the goods then duty cast on the revenue to brought on record from where the goods were procured. The allegation leveled against the appellant are only on the basis of statement of supplier. No cross examination of the supplier was afforded to the appellant for fair trial. I also find that in the case of Rajan Engineering Works which was also before this Tribunal and this Tribunal has observed as under:

6.?On careful consideration of the submissions made by both sides, I find that in this case, the demand has been raised only on mere statement of the inputs supplier that he has not supplied the inputs and he has not manufactured the same in his statement dated 26-5-2006. In fact, the appellants have taken the credit on the invoices raised during the period October, 2003 to August, 2004. As observed by this Tribunal in the case of Paramount Communication Ltd. cited supra, that the raid was conducted on 14-2-2006 in the factory premises of the inputs supplier. The finding about absence of manufacturing activity in the factory is restricted only for the period of search of the factory and not to the period prior to the search. Therefore, the statement of inputs supplier is not for the period from October, 2003 to August, 2004. Further, in the case of Prakash Industrial Corporation (supra), this Tribunal has observed that the department did not bother to investigate whether the actual vehicle numbers used in transportation of goods to the place of the assessee, therefore, no evidence has been brought on record. In the case of Motherson Sumi Electric Wires (supra), again this Tribunal has observed that there is no evidence in the form of statement of transporters to support the case of the Department regarding non-receipt of inputs by the appellants. In this case also, the department has failed to produce any statement of the transporter or the actual receipt the goods that the goods have been transported out of state. Therefore, in the absence of any corroborative evidence, the case cannot be made merely on the statement of the inputs supplier.

7. As investigation is deficient and no corroborative evidence have been produced by the Revenue on record, the same is the observation of this Tribunal, in the case of Rajan Engineering Works, therefore, I hold that appellant has rightly availed the Cenvat credit on the inputs on the strength of the invoices issued by KPIL. In these circumstances, impugned order is set aside, the appeal is allowed with consequential relief if any.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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