M/S. Rajasthan Industrial Gases Ltd vs Commissioner Of Central Excise
- CitationExcise Appeal No. 60298 of 2013- Ex (SM)
Ratio decidendi
The rule this decision rests on
The denial of Cenvat credit cannot be sustained where the assessee has offered a satisfactory explanation for the flagged discrepancies (raw material procured at a price higher than the finished goods' price, and a mismatch between the vehicle number on the supplier's invoice and the vehicle number on the goods receipt), and the Revenue has produced no corroborative evidence supporting the allegations made in the show cause notice. Where the assessee's explanation for an apparent discrepancy in procurement price, namely that the average selling price of finished goods exceeded the average cost of the raw material, is not rebutted by any evidence on the record, a higher procurement price alone does not justify denial of credit. A mismatch between the vehicle number on the supplier's invoice and that on the goods receipt does not, by itself, defeat a credit claim where the assessee explains that goods were transported by the supplier's truck up to the supplier's godown and thereafter by the assessee's transporter in a different vehicle, and that explanation is not shown to be false.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-In-Appeal No. 93(VC)CE/JPR-I/2013 dated 21/08/2013 passed by Commissioner of Central Excise (Appeals), Jaipur I ]
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. Rajasthan Industrial Gases Ltd. Appellants
Vs.
Commissioner of Central Excise Respondent
Jaipur
Appearance:
Shri Mayank Garg, Advocate for the Appellants
Shri R K Mishra, AR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Date of Hearing /decision: 12.2.2015
FINAL ORDER NO. A/ 50400 /2015-Ex(SM)
Per Ashok Jindal :
The appellant is in appeal against the impugned order wherein Cenvat credit has been denied on the items namely steel wire and HB redraw wire on the premise that the procurement price of above items is more than 25% more, the selling price of finished goods and the truck number mentioned by the supplier in their invoice and truck number mentioned in GR do not match. Therefore, show cause notice was issued to deny Cenvat credit. By the impugned order, Cenvat credit was denied, consequently duty was demanded along with interest and equivalent amount of penalty was also imposed.
2. Learned Counsel for the appellant submits that the average price during the impugned period, of finished goods was of Rs.32000/- PMT wherein cost of cost price was Rs.28000/- PMT. He also submits that the appellant has explained at the time of audit that due to shortage of raw material during the period they procured the raw material at higher rate but the average price of their finished goods is higher than the cost price. Therefore, the procurement of raw material at higher price cannot be reason to deny Cenvat credit during the period. For mis-match of truck number in invoice and GR, it is explained by the appellant that during the course of investigation itself supplier of goods supply the goods upto their godown and from there goods were transported by the transporter of the appellant. In the Invoice supplier mentioned the truck number which carried the goods up to the godown and from godown the transporter carrying goods in another truck having different vehicle number. The mis- match of the vehicle number was explained but no inquiry has been conducted at the end of transporter to ascertain the truth.
3. On the other hand, learned AR submits that no prudent men shall buy the raw material at higher rate than the rate of finished goods. Admittedly, the raw material procured by the appellant is having price 25% more than the finished goods. Further the vehicle number of GR and the invoice were not matching therefore both the lower authorities has correctly denied the credit and demanded duty from the appellant. Therefore, impugned order is to be upheld.
4. Heard the parties. Considered the submissions.
5. In this case, Cenvat credit sought to be denied on two grounds (a) the value of raw material is higher than the value of finished goods, (b) there is mis-match of vehicle number on invoice and GR. Although the appellant has explained both the issues, during the course of investigation, by saying that average price of finished goods is much higher than the average price of raw material and the supplier has transported the goods up to his godown in his own truck and also have explained to the investigating team. Thereafter, the goods have been transported by the transporter to the appellants premises. This explanation has not been considered by both the lower authorities. If same would have been considered then the appellant would not have traveled upto this Tribunal. As appellant has explained the discrepancy sought by the audit team, I do not find any discrepancy in the explanation given by the appellant and Revenue has not come up with any corroborative evidence to allege the allegations made in the show cause notice. In these circumstances, I hold that the appellant has correctly taken the credit consequently the impugned order is set aside. Appeal is allowed with consequential relief.
(dictated and pronounced in the open court )
( Ashok Jindal ) Member(Judicial)
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