2016 (10) TMI 652 - AT - Central Excise

Revenue Appeals Denied: Cenvat Credit Disallowed for Vehicle Invoices

The case involved appeals by the Revenue against orders setting aside demands confirmed by an adjudication order regarding cenvat credit on inputs for ... Cenvat credit - admissibility of transporter/driver statements as evidence - proof of receipt of goods by production of vouchers and goods receipts - denial of credit and confirmation of duty with interest and penaltiesCenvat credit - admissibility of transporter/driver statements as evidence - proof of receipt of goods by production of vouchers and goods receipts - Cenvat credit qua specified invoices of M/s Novice Polymers is not admissible and demand with interest and penalties is sustained. - HELD THAT: - The Revenue's allegation that the assessee had only received cenvatable invoices without actual receipt of goods rested on statements of drivers/transporters. The assessee countered with vouchers and other documents purporting to certify receipt. The Tribunal examined specific instances and found on admissible evidence that certain vehicle entries could not have transported the goods or the movement was not substantiated: (a) vehicles HR-38N-1285 and HR-38M-2282 were refrigerated vans and, on that basis, the drivers' statements were accepted and corresponding cenvat credit disallowed; (b) for vehicle RJ14-1G-7077 the vehicle-owner produced a GR issued by the transporter and the owner's statement was uncontroverted by the assessee, accordingly the driver/owner statement was accepted and credit on those invoices denied; (c) vehicle DL 1M-1360 was a dumper usable only for debris and the owner's statement was recorded and accepted, leading to denial of credit on invoices bearing that vehicle number. On these specific findings the Tribunal modified the appellate authority's order by denying cenvat credit on the identified invoices and confirmed duty with interest and imposed equivalent penalties on M/s Novice Polymers. [Paras 6, 7, 8, 9]Cenvat credit in respect of invoices bearing vehicle nos. HR-38N-1285, HR-38M-2282, RJ14-1G-7077 and DL 1M-1360 is denied; duty, interest and penalties in respect thereof are confirmed against M/s Novice Polymers.Cenvat credit - proof of receipt of goods by production of vouchers and goods receipts - Cenvat credit allowed to M/s Airvision India Pvt. Ltd. as there was no contrary evidence produced by Revenue to upset the Commissioner (A)'s findings. - HELD THAT: - The Tribunal observed that Revenue failed to produce any evidence contradicting the findings recorded by the Commissioner (A). In absence of any tangible material to rebut the assessee's case, the appellate authority's conclusion permitting cenvat credit was maintained and the Revenue's appeal was dismissed insofar as Airvision India Pvt. Ltd. is concerned. [Paras 10, 11]Cenvat credit allowed to M/s Airvision India Pvt. Ltd.; Revenue's appeal dismissed in respect of that party.Final Conclusion: The appeals are disposed: cenvat credit is denied and corresponding duty, interest and penalties confirmed for specified invoices of M/s Novice Polymers; cenvat credit is allowed to M/s Airvision India Pvt. Ltd. and the Revenue's appeal is dismissed as to that party. Issues:Revenue's appeal against demand confirmed by adjudication order - Denial of cenvat credit on the strength of invoices - Allegations of not receiving goods - Appeal by respondents before Commissioner (A) - Appeal before CESTAT Chandigarh.Analysis:The case involved appeals by the Revenue against orders setting aside demands confirmed by an adjudication order. The respondents, manufacturers of plastic moulds, were availing cenvat credit on inputs. A search was conducted at their premises based on intelligence, leading to allegations that they received only cenvatable invoices without receiving the goods. The adjudicating authority denied the cenvat credit, confirmed the duty demand, and imposed penalties. The respondents appealed before the Commissioner (A), who set aside the adjudication orders, prompting the Revenue to appeal before CESTAT Chandigarh.The Revenue argued that statements of drivers indicated that goods were not transported to the respondents, justifying the denial of cenvat credit. The Revenue contended that certain drivers did not have permits for transport outside Delhi and were not present in Gurgaon on dates mentioned in invoices. On the other hand, the respondents' counsel asserted that drivers admitted transporting goods and issued payment vouchers, supporting the allowance of cenvat credit.After hearing both parties, CESTAT Chandigarh observed that the Revenue's case hinged on the allegation that the respondents did not receive goods but only cenvatable invoices, based on statements of drivers. The respondents countered this by producing vouchers certifying receipt of inputs. However, in specific instances like refrigerated vans incapable of transporting plastic moulds, cenvat credit was denied for those vehicles. The judgment modified the order for one respondent, denying cenvat credit for specific vehicle invoices.In another instance, the owner of a vehicle provided uncontroverted evidence of transporting goods, leading to the denial of cenvat credit for that vehicle's invoices. Similarly, for a dumper vehicle, the owner's statement was considered admissible evidence, resulting in the denial of cenvat credit. Consequently, the denial of cenvat credit on specific invoices led to duty confirmation, interest imposition, and penalties on Novice Polymers.Regarding Airvision India Pvt. Ltd., the Revenue failed to produce contrary evidence to the Commissioner (A)'s observations, leading to the dismissal of the appeal against denying cenvat credit. Ultimately, the judgment denied cenvat credit to Novice Polymers while allowing it for Airvision India Pvt. Ltd., disposing of the appeals accordingly.