M/S. New India Cuprotech vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-SKSS/195-197/VAPI/2010 dated 22.09.2010, Passed by Commissioner (Appeals) Central Excise, & S.T., Vapi)

1. M/s. New India Cuprotech : Appellant (s) 2. Shri Vishnu Agarwal 3. Shri Kalpesh Rathod

VERSUS

Commissioner of Central Excise & S.T., Vapi : Respondent (s)

Represented by :

For Appellant (s) : Ms. Dimple Gohil, Advocate For Respondent (s) : Shri G.P. Thomas, Authorised Representative

For approval and signature :

Mr. P.K. Das, Honble Member (Judicial)

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

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

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

Yes

CORAM :

Mr. P.K. Das, Honble Member (Judicial)

Date of Hearing : 27.03.2015

Date of Decision : 01.05.2015

ORDER No. A/10464-10466/2015 Dated 01.05.2015

Per : Mr. P.K. Das;

All these appeals are arising out of a common order and therefore, all are taken up together for disposal.

2. The relevant facts of the case in brief, are that the appellant No. 1 M/s. New India Cuprotech was engaged in the manufacture of Copper Ingots, Copper billets, Copper flats/bar, Copper strips, Copper Rods, Copper Wires and other articles of copper classifiable under Chapter 74 of the schedule of Central Excise Tariff Act, 1985. They were availing CENVAT credit benefit under CENVAT Credit Rules. On 27.03.2008, the Central Excise officers of Preventive Section, Vapi Commissionerate visited the appellants factory and searched the premises. The said officers seized several records including input invoices for the period March 2004 to March 2008. It has also recorded the statement of various persons including Shri Vishnu Agarwal, partner and Shri Kalpesh Rathod, Manager-cum-Authorised Signatory and the transporters.

3. A Show Cause Notice dated 30.03.2009 was issued by the Joint Commissioner, Central Excise and Customs, Vapi proposing the demand of CENVAT credit amounting to Rs. 32,08,820/- alongwith interest and penalty of equal amount of CENVAT credit on the appellant No. 1. It has also proposed to impose penalty on the other appellants. It has been alleged that during the period from March 2004 to March 2008, the appellant availed CENVAT credit on the basis of CENVAT invoices, without actual receipt of the inputs. By the adjudication order, the adjudicating authority confirmed the demand of wrongly availed CENVAT credit of Rs. 32,08,820/- alongwith interest and imposed penalty of equal amount of duty. It has appropriated the amount as already paid by the appellant. It has imposed penalty of Rs. 4 Lakhs and Rs. 1 Lakh on Shri Vishnu Agarwal, Partner and Shri Kalpesh Rathod, Manager-cum-Authorised Signatory, respectively, (Appellant No.2 and 3 herein). By the impugned order, the Commissioner (Appeals) upheld the adjudication order and rejected the appeals filed by the appellants.

4. Learned Advocate on behalf of the appellants submits that there is no dispute that the input supplier delivered the materials to the appellant, accompanied with the Central Excise invoices and were duly recorded in their CENVAT records and also used in the manufacture of final products, cleared on payment of duty. It is submitted that the invoices were sent to the concerned jurisdictional Central Excise officers of the suppliers end, who verified and reported that the invoices were duty paid. It is also submitted that the appellant No. 2 and 3, in their statements stated that they have received the raw materials. The observation of the appellants were only when the RTO report was shown that three-wheeler or tempo can not carry such materials. It is contended that the input supplier confirmed the delivery of the goods and the payment were made by cheque. The genuinenity of the invoices is of no doubt. In this context, credit can not be denied merely on the basis of the report of the RTO. She also drew attention of the Bench to the payment vouchers in the memorandum of appeal. She has filed written submission which is kept on record.

5. Learned Authorised Representative for the Revenue reiterated the findings of the Commissioner (Appeals). He submits that as per RTO report the vehicle numbers mentioned in the invoices are not capable of carry such a huge quantity of materials. He further submits that onus lies on the assessee to establish the receipt of the goods in the present case. The assessee failed to prove the receipt of the goods and therefore, they are not eligible to avail credit. He further submits that the appellants failed to produce Lorry Receipt/ Transport payment vouchers before the lower authorities.

6. After hearing both the sides and on perusal of the records, I find that the appellants availed CENVAT credit on the strength of 18 invoices issued by the manufacturers of articles of Copper. The suppliers stated that the vehicles were arranged by the appellant and they have not verified the vehicles numbers at the time of dispatch. They further stated that they were unable to produce the Lorry Receipts in the instant case as the appellant had arranged for the transportation of the goods. It is seen from the adjudication order that verification report from respective jurisdictional Central Excise authorities were received stating that invoices referred for verification were issued by the respective supplier on payment of duty mentioned therein. Thus, there is no dispute that the duty paying documents are genuine. It is also revealed from the records that the suppliers supplied the goods and the appellant arranged the transportation. There is no dispute that the appellant paid the amount by account payee cheques to the input suppliers which is recorded in the statutory records. The dispute relates to as per RTO report the vehicle numbers mentioned in the said 18 input Invoices, were not capable of transporting the goods. Learned Advocate for the appellant submits that the receipt of inputs at their factory and used in the manufacture of final product as evident from CENVAT records, which was not objected by the Department.

7. The Hon'ble Gujarat High Court in the case of Commissioner vs. Motabhai Iron and Steel Industries  2015 (316) ELT 374 (Guj.), has observed that merely on the basis of such an RTO report credit can not be denied holding that inputs were not received alongwith invoices. It is contended by the appellant that in many cases the transporters themselves give wrong registration numbers in their own vested interest and no enquiry was conducted with the transporters office. I find from the impugned order that the Commissioner (Appeals) observed that the appellant had not produced the Lorry Receipts of the same and the evidence of payments made to the transporters. It is noticed that the appellants produced the Cash Payment Vouchers of transportation of goods before the Tribunal. On perusal of the said evidence, I find that some cash payment vouchers were signed on proper Revenue stamp and also signed by other persons of the appellant Company. The learned Authorised Representative for the Revenue submitted that these documents were not placed before the lower authorities. In my considered view, the appellant should be given an opportunity to produce these evidences before the adjudicating authority, in the interest of justice.

8. In view of the above discussions, impugned orders are set-aside. Matter is remanded to the adjudicating authority for verifying the payment vouchers and other evidences and to pass an order in accordance with the law. Needless to say that adjudicating authority shall give proper opportunity of hearing before passing the order. Appeals are allowed by way of remand.

(Order pronounced in open Court on 01.05.2015)

(P.K. Das) Member (Judicial) .KL

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