M/S. Nidhi Metal Auto Components P Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 28/CE/Appl/ DLH-IV/ 2012 dated 29.03.2012 passed by Commissioner of Central Excise (Appeals), Faridabad ]

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. Nidhi Metal Auto Components P Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Delhi IV

Appearance:

Shri N L Jangir, Advocate for the Appellants

Shri G R Singh, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 27.1.2015

FINAL ORDER NO. A/ 50348 /2015-Ex(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order demanding duty on the ground that the supplier of the goods has issued invoices and not delivered the goods to the appellant.

2. The facts of the case are that DGCI conducted the investigation at the end of M/s. Psondia Steel Profile. Ltd. ( in short PSPL) and statement of Shri Yashpal Sharma, DGM was recorded. In his statement, he submits that they are receiving HR coils from Steel Authority of India as their factory was closed during the period. They issued the invoices of HR coils and CR strips to various dealers but without delivery of the goods. The investigation further done at the end of the dealers namely M/s. Bhagwati Trading and Ayushi Steel Co. Ltd. and their director and proprietor Shri Rupesh Bansal submits that they have received inputs from PSPL and issued 6 invoices to various persons namely JRM Steel Pvt. Ltd., Shivam Corpn. India, Ashkat Industries, Kay Iron Works, United Chain Industries, Chanderpur Works and Vishal Metal Casting and Singhal Strips (P) Ltd. On the basis of statement of manufacturer of goods and the dealer supplier DGCI issued a show cause notice to the appellant to deny Cenvat credit on the invoices issued by M/s. Bhagwati Trading & co. and Ayushi Steel to deny Cenvat credit as invoices have been issued but no goods had been received. The show cause notice was adjudicated. Demand of duty was confirmed along with interest and equivalent amount of penalty was also imposed.

3. On appeal before Commissioner (Appeals), the order of adjudication was confirmed therefore appellant is before me.

4. Learned Counsel for the appellant submits that in this case total 9 invoices are in dispute. Out of 9 invoices, 6 invoices pertain to PSPL, manufacturer, remaining three pertain to Bhushan Steel and Rathi Steel. The amount of Cenvat credit pertain to these three invoices is Rs.45,238/-. He further submits that dispute is in relation to the availment of Cenvat credit on HR coils and CR sheets. But in the statement of Shri Yashpal Sharma, DGM of PSPL, it is clear that they issued fake invoices for CR sheets and HR coils. Therefore duty cannot be demanded. He further submits that the appellant has received physical goods along with invoices issued by the dealer which has been transported through tractor trolley etc. and same has been used in the manufacture of final product which has been cleared on payment of duty. The payment of inputs has been made by account payee cheque. Further, no investigation was conducted by the DGCI and no corroborative evidence has been produced by the Revenue except statement of supplier and dealer to allege that appellant has received invoices not the goods. He further submits that the statement of dealer does not name the appellant and supplier of the invoices thereof and no cross examination was granted to the appellant by the lower authorities. In these circumstances, impugned order is to be set aside. He also relied on the decision of certain case law namely:

1) Rinox Engg. Vs. CCE, Chandigarh

[2014 (304) ELT 436 (Tri-Del)]

2) Rajan Engineering Works vs. CCE Delhi

Final Order No. 545/2011 SM dated 14.7.2010

3) CC vs. Juhi Alloys Ltd.

[2014 (302) ELT 487 (All)].

5. On the other hand, leanred AR opposed the contention of the learned Counsel and submits that in this case investigation has been conducted by DGCI and manufacturer and dealer have admitted in their statement that M/s. PSPL have not manufactured any goods and issued only invoices. No goods were carried along with invoices. In these circumstances, when the statement of manufacturer supplier is that they have not supplied any goods and only issued invoices, there is no requirement of any corroborative evidence. It is the duty of the appellant to prove that they have received the goods physically. In these circumstances, appeal is to be dismissed. To support his contention he relied on the decisions of

1) CCE Mumbai vs. Kalvert Foods India Pvt. Ltd.

[2011 (270) ELT 643 (SC)];

2) CCE Ludhiana vs. Indian Special Castings (P) Ltd.

[2008 (227) ELT 322 (Tri-Del)] ;

3) Ranjeev Alloys Ltd. vs. CCE Chandigarh

[2009 (236) ELT 124 (Tri-Del)];

4) Ranjeev Alloys Ltd. vs. CCE Chandigarh

[2009 (247) ELT 27 (P & H)];

5) Indian Special Castings Pvt. Ltd. vs. Commissioner

[2010 (255) ELT A 44 (SC)].

6) CCE vs Modern Lighting System

[2010 (254) ELT 185 (Tri-Del)]

7) Havells India Ltd. [2011 (271) ELT 582 (Tri-Del)],

8) Mehta & Co. [2011 (264) ELT 481 (SC)],

6. Heard both sides. Considered the submissions.

7. In this case, the main contention of the appellant is that they have received the goods along with invoices and same have been used in the manufacture of final products. The payment of inputs has been through account payee cheque. No investigation was conducted at the end of appellant, no cross examination of the supplier of goods or manufacturer was granted to the appellant. Further I find that out of 9 invoices, only 6 invoices pertain to PSPL who has admitted that they have issued invoices. Further PSPL has also denied that HR coils have been supplied along with invoices. But no corroborative evidence reveal any proof that the goods received by the appellant were not containing invoices with them. Further more the case law relied upon by learned AR have also been examined in the case of Kalvert Foods India Pvt Ltd. (supra). The issue before the Honble Apex Court was of clandestine removal of the goods by the assessee. Admittedly it is the case before me. Further in the case of Indian Special Castings P Ltd., Ranjeev Alloys Ltd. , Modern Lighting System, having the issue that goods have been transported vehicles, which was mentioned in the invoices are not able to carry the goods in question. In this case, on this count, no investigation has been conducted whether vehicles involved in these cases are capable of carrying the impugned goods or not. Therefore, case law relied upon by the learned AR is of no help. Further I find that in the case of Havells India Ltd. [2011 (271) ELT 582 (Tri-Del)], the quantity mentioned in Bill of Entry was 21 MT whereas the invoices were issued for 60MT and in case of Mehta & Co. [2011 (264) ELT 481 (SC)], the issue before the Apex Court was that whether extended period of limitation is invokable or not. Therefore, all case law relied upon by learned AR are of no help to him.

8. I find that in the case of Juhi Alloys Ltd. (supra), the Honble Apex Court has held that when the invoices have been issued by registered dealer, invoices of manufacturer issued in the name of Registered dealer found fake, and manufacturer of the inputs is not in existence. It was held by Honble High Court that it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee has duly acted with all reasonable diligence in its dealing with the first stage dealer within the meaning of Rule 9(3) of Cenvat Credit Rules, 2004. Admittedly in this case the allegation has been made against the appellant on the basis of statement given by the manufacturer, dealer / supplier of the goods, but no investigation has been conducted at the end of the appellant. Moreover, there is no discrepancy in the invoices issued to the appellant and all the payments were made through account payee cheque. In these circumstances, I hold that Revenue has failed to prove their case with supporting evidence. In these circumstances, impugned order is set aside. Appeal is allowed with consequential relief, if any.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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