Tribunal overturns denial of Cenvat credit due to lack of evidence

The Tribunal set aside the order seeking denial of Cenvat credit to the appellant for alleged wrongful availing based on invoices without actual receipt of goods. Lack of substantial evidence beyond third-party statements and the absence of cross-examination opportunities for transporters' statements led to the decision. The Department failed to prove the appellant's wrongful credit availing, resulting in the Tribunal allowing the appeal in favor of the appellant.

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Issues: Alleged wrongful availing of Cenvat credit based on invoices without actual receipt of goods.

In this case, the appellant, engaged in manufacturing copper products, availed Cenvat credit on Central Excise duty paid on inputs used in manufacturing. The Department alleged wrongful credit availing based on invoices without actual receipt of goods. Investigation revealed invoices used for credit were not physically received. The Show Cause Notice sought denial of Cenvat credit, leading to an order for recovery and penalties. The Commissioner (Appeals) upheld the demand, prompting the appeal before the Tribunal.

The appellant argued no discrepancies were found in their books, and a statement confirmed receipt and use of goods for manufacturing. The appellant relied on precedents where lack of cross-examination affected witness statements' credibility. The Department contended that statements from transporters, not retracted, supported the denial of credit based on non-receipt of goods.

The Tribunal noted the lack of substantial evidence beyond third-party statements to prove non-receipt of goods. Transporters' statements lacked cross-examination opportunity, mirroring precedents where witness credibility was crucial. As the Department failed to discharge the onus of proving wrongful credit availing, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

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