2015 (9) TMI 37 - AT - Central Excise

Tribunal overturns Revenue decision due to lack of evidence in Cenvat credit dispute.

M/s G.S. Alloy Castings Ltd. Unit-II Versus Commissioner of Central Excise, Guntur

M/s G.S. Alloy Castings Ltd. Unit-II Versus Commissioner of Central Excise, Guntur - 2016 (331) E.L.T. 310 (Tri. - Bang.) Issues: Alleged availment of Cenvat credit without receiving raw material.Analysis:1. The appellant, engaged in manufacturing MS Bars, procured raw materials from a specific source. A search conducted at another entity revealed incriminating documents implicating a fake arrangement involving the appellant, M/s Usha Enterprises, and M/s SreeTirumala Steel Rolling Mills Pvt. Ltd.2. Statements from various individuals were recorded, admitting to the arrangements and financial transactions. The Revenue alleged that the appellant availed Cenvat credit without actually receiving the raw material, leading to proceedings, demand confirmation, and penalty imposition.3. The Commissioner (Appeals) noted that the Revenue's case relied on uncorroborated statements without documentary evidence. Transporters' involvement was not investigated, and the appellant's officers did not deny receiving the raw material. The Commissioner set aside the original order based on transporter affidavits.4. The Revenue appealed the Commissioner's decision to the Tribunal, which remanded the case due to consideration of new evidence. In the subsequent proceedings, the Commissioner upheld the original order, leading to the present appeal.5. The Tribunal observed that the Revenue's case lacked concrete evidence beyond statements from third parties. The onus to prove clandestine activities rested with the Revenue, requiring tangible evidence. Lack of corroboration and failure to investigate transporters raised doubts on the Revenue's allegations.6. The appellant's receipt of raw material was confirmed through statements and Cenvat credit records, challenging the Revenue's claim of non-receipt. The impossibility of manufacturing final products without raw materials from the disputed invoices further weakened the Revenue's case.7. Ultimately, the Tribunal found no merit in the Revenue's stance, setting aside the impugned order and allowing the appeal with consequential relief. The judgment highlighted the importance of concrete evidence in allegations of clandestine activities and the necessity to establish claims beyond uncorroborated statements.This detailed analysis of the judgment showcases the progression of the case, the arguments presented by both sides, and the legal reasoning behind the final decision.