M/S Victora Tools Engineers (P) Ltd vs C.C.E. Delhi-Iv

[Arising out of Order-In-Appeal No. 29/CE/APPL/DLH-IV/2013 dated: 8.04.2013 passed by Commissioner (Appeals) Delhi-IV]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, 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 Victora Tools Engineers (P) Ltd. ...Appellant

Vs.

C.C.E. Delhi-IV Respondent

Appearance:

Mr. N K Sharma, Advocate for the Respondent

Mr. M R Sharma, DR for the Appellants

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing.26.05.2015

FINAL ORDER NO. 51474 /2015

Per S. K. Mohanty:

Brief facts of the case, leading to this appeal, are as follows:-

The appellant is engaged in the manufacture of motor vehicle components, parts of lift and parts of switch board falling under chapter heading 8714, 8413 & 8538 of the Central Excise Tariff Act, 1985. The appellant avails cenvat credit in respect of central excise duty paid on the inputs used in or in relation to manufacture of the aforementioned final product. For disputed period, Central Excise Range Officials verified the records maintained by the appellant and found that cenvat credit has been taken by the appellant based on the invoices issued by M/s Bhagwati Trading Company and M/s Ayushi Steel Company (P) Ltd. Faridabad. Further, investigations carried out in the place of the above suppliers reveal that those suppliers have passed on inadmissible cenvat credit to various manufacturers including the appellants without actually supplying/ delivering the goods. The Jurisdictional Range Superintendent intimated the appellant regarding taking of such irregular credit, and immediately thereafter, the appellant reversed the cenvat credit of Rs. 1,04,102/- vide RG-23 A Part-II entry No. 2370 dated 5.01.2009 with regard to the material supplied by the aforementioned suppliers during the period 2003-2004, 2004-2005 and 2007-2008. However, in the letter dated 6.1.2009 addressed to the Jurisdictional Range Superintendent, the appellant has stated that though the cenvat credit amounting to Rs. 1,04,102/- has been reversed from the cenvat credit account, but the appellant deserves the right to contest the matter in appeal. Subsequently, Show Cause Proceedings were initiated against the appellant, seeking recovery of irregularly availed cenvat credit and the same were culminated in the Adjudication Order dated 5.6.2012 wherein, besides confirming the Cenvat demand, an equal amount of penalty has been imposed on the appellant. Further, interest amounting to Rs. 65,312/- has also been confirmed in the said order. Feeling aggrieved with the said Adjudication order, the appellant had preferred appeal before the Commissioner (Appeals), who vide the impugned order dated 8.4.2013 has rejected the appeal filed by the appellant, by upholding the Adjudication order. Hence, this present appeal before this Tribunal.

2. The Ld. Counsel for the appellant Sh. N.K. Sharma submits that the disputed goods admittedly are inputs for the appellant and are used in or in relation to manufacture of the final products and the duty attributable to the final product are adjusted from the cenvat credit taken on such input services. He, further submits that the disputed goods have been received from M/s Bhagwati Trading Company & M/s Ayushi Steel Company under proper and valid duty paying documents and that upon receipt of the disputed goods in the factory, the receipt particulars have been duly entered in the prescribed cenvat record i.e. RG-23A Part-I and Part-II register. The Ld. Counsel further submits that the appellant had also maintained other records to prove that the goods have actually been received in the factory. Further, the Ld. Advocate also submits that the payment particulars regarding supply of goods have been duly reflected in the ledger account maintained by the appellant. According to him, since the payments have been made in the shape of account payee cheque and such payment has been routed through the approved banking channel, allegation of non-receipt of the disputed goods is far-fetched and the duty liability cannot be fastened on the appellant.

3. Per contra, the Ld. A.R. Mr. M.R. Sharma appearing for the Respondent reiterated the findings recorded in the impugned order to justify confirmation of the duty demand and imposition of penalty.

4. The short question involved in this appeal for determination by this Tribunal is, as to whether, the duty liability can be fastened on the appellant on the alleged ground that the goods covered under the invoices issued by the second stage dealer has not been received in the factory.

5. I find that the Revenue-Respondent had relied upon certain statements recorded from outside parties to substantiate the allegation that the goods have not been received in the factory of the appellant. In this context, statements recorded from Shri Rupesh Bansal, Proprietor of M/s Bhagwati Trading Co. are relevant for settlement of the present dispute. In the statement dated 07.11.2005, the question asked by the Central Excise Department was to the effect that who are the main customers, to whom you had passed on the Modvat credit? To the said query, the answer of Mr. Bansal was they passed on modvat benefit to various customers and M/s United Chain Industries and M/s Iron Works (Jorian) Pvt. Ltd., Jamuna Nagar are the main customers. Further, in the statement recorded on 16.03.2006, pursuant to the query of the Department as to who are the parties to whom the trading firms M/s Bhagwati, Ayusi Steel and Om Iron & Steel have issued the bills; Mr. Bansal had furnished the information, where the name of the appellant was not finding the place.

6. I find that no iota of credible evidence has been brought on record to prove non-receipt of goods by the appellant. Though, the statements recorded from outside agencies have been relied on for confirmation of the duty demand, but the same nowhere stated the name of the appellant that only the invoices have been issued to it, without supplying the disputed goods. Hence, in my opinion, confirmation of duty/Cenvat demand, without proper evidence, is not legal and appropriate. Further, in view of the fact that the appellant has maintained adequate records to demonstrate receipt of the disputed goods under the cover of valid and proper duty paid documents, the charges leveled against the appellant for taking fraudulent credit is not sustainable in the eyes of law. Thus, I am of the view that confirmation of the cenvat demand, imposition of penalty by the Authorities below are liable to be set aside. Accordingly, by setting aside the impugned order, I allow the appeal in favour of the appellant.

(Dictated and pronounced in open court)

(S.K. Mohanty)

Member(Judicial)

Neha

Page | 5