2011 (5) TMI 862 - HC - Central Excise

Tribunal stresses evidence requirement for Cenvat credit claim denial

UG. Sugar & Industries Ltd. Versus Commissioner

The Tribunal dismissed the appeal as the appellants failed to provide sufficient evidence to substantiate their claim for Cenvat credit on items used in ... CENVAT Credit - Fabrication of equipments - Held that:- Once the defence was raised by the appellants, it was essentially for the appellants to lead necessary evidence in that regard. Mere raising of plea in answer to the show cause notice does not by itself mean the proof of correctness of such plea. When the plea relates to certain factual aspect, it is absolutely necessary for the person raising such plea to make the same good by producing sufficient evidence in support of such plea. Undisputedly, the appellants did not produce any such evidence in support of such plea - Tribunal has correctly held that the onus lies on the person claiming the benefit to maintain the account books and then claim the benefit. That onus has not been discharged - Decided against assessee. Issues:Claim for Cenvat credit on items used in fabrication of equipment, pipe lines, and storage tanks.Analysis:The appellants contended that the items in question were utilized not only in fabricating various equipment in their factory but also in making pipe lines and storage tanks. They argued that they had specifically mentioned in their reply to the show cause notice that some items were used for making pipe lines and other equipment, thus entitling them to Cenvat credit. The Tribunal, however, held that the appellants failed to provide necessary evidence to substantiate their claim. The Tribunal emphasized that raising a defense in response to a show cause notice does not automatically prove its correctness, especially when it involves factual aspects. The Tribunal concluded that the appellants did not produce any evidence to support their claim, leading to the dismissal of the appeal.The Tribunal correctly placed the onus on the appellants to maintain proper account books and provide evidence to support their claim for Cenvat credit. Since the appellants failed to discharge this burden of proof, the Tribunal's decision to dismiss the appeal was upheld. The judgment highlights the importance of substantiating claims with sufficient evidence, especially in cases where factual aspects are in question. In this instance, the appellants' failure to provide the necessary evidence led to the denial of their claim for Cenvat credit. The decision underscores the principle that the burden of proof lies with the party seeking a benefit, and failure to meet this burden can result in the dismissal of the claim.