Tribunal allows appeal for cenvat credit due to lack of evidence

The tribunal set aside the order denying cenvat credit to the appellant due to the non-existence of the dealer who supplied goods. Lack of conclusive evidence against the appellant and reliance on previous tribunal decisions led to the allowance of the appeal, emphasizing the importance of corroborative evidence before denying credit. The decision highlighted the need for thorough investigations and verification of goods' delivery, ultimately ruling in favor of the appellant and granting any consequential relief.

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Issues:
Denial of cenvat credit on inputs due to non-existence of the dealer M/s S.K. Garg & Sons who supplied goods to the appellant.

Analysis:
The appellant appealed against the denial of cenvat credit on inputs based on the premise that the dealer M/s S.K. Garg & Sons, from whom goods were procured, was non-existent. Investigation revealed that the premises of M/s S.K. Garg & Sons were locked and non-existent, leading to the cancellation of their registration retrospectively. The appellant was alleged to have received invoices but not the goods, prompting a show cause notice, resulting in the denial of cenvat credit, duty demand, interest, and penalty imposition.

The appellant contended that they physically received the goods as stated, used them in manufacturing final goods, and that no investigation was conducted with the transporter or manufacturer/supplier of the goods. They argued that since M/s S.K. Garg & Sons filed returns accepted by the department, cenvat credit should not be denied. The appellant also cited a precedent decision in support of their case.

On the contrary, the department's representative argued that M/s S.K. Garg & Sons engaged in issuing fake invoices for cenvat credit availment, with no actual storage facility for the goods. The Commissioner (Appeals) allowed credit only when goods were received the same day as invoiced, denying credit for delays. Lack of storage capacity with M/s S.K. Garg & Sons was cited as a reason for disallowing cenvat credit.

After hearing both sides, the tribunal found that no investigation was conducted at the end of the manufacturer/supplier or transporter to verify the goods' delivery. M/s S.K. Garg & Sons being a registered dealer who filed accepted returns further supported the appellant's claim. Relying on previous tribunal decisions, the tribunal held that without conclusive evidence against the appellant, cenvat credit cannot be denied solely based on the lack of storage facility, especially when the landlord confirmed the premises were let out to the dealer.

Based on the above, the tribunal set aside the impugned order, allowing the appeal with any consequential relief. The decision was made in line with previous tribunal rulings, emphasizing the need for corroborative evidence before denying cenvat credit to the appellant.

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