https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=770129 https://www.taxtmi.com/caselaws?id=770129 CENVAT Credit availed by the appellant-company on inputs purchased from a registered dealer - credit availed credit irregularly on the basis of invoices without actual receipt of inputs, by way of paper transactions - imposition of penalties under Rule 26(1) and (2) of the Central Excise Rules, 2002 upon the co-appellants - extended period of limitation - HELD THAT:- In this case, the appellant-company was procuring inputs through the dealer, namely, M/s. Vikash Industrial Corporation, who is a registered dealer. The said dealer has shown, in his invoices, the manufacturers as M/s. Tata Steel Limited, M/s. Steel Authority of India Limited, M/s. Jindal Steel Products Limited, M/s. Jindal Steel & Power Limited, M/s. Garden Reach Ship Builders & Engineers Limited, M/s. Ambuja Cements Limited, M/s. Balmer Lawrie & Company Limited, M/s. Skipper Limited, etc. There is no statement from the registered supplier cum dealer in the instant case i.e. M/s Vikash Industrial Corporation (proprietor: Sri Dipak Kumar Nathani), denying supply of goods to the appellant-company. If such be the admitted position, and it is said so after carefully going through the statement of Sri Dipak Kumar Nathani dated 05.02.2013, then we find it difficult to hold that the appellant-company had been required to go behind the covering documents issued by the said M/s. Vikash Industrial Corporation under the provisions of the Central Excise Act, 1944 read with the Central Excise Rules, 2002 - when all relevant particulars stood duly mentioned in the said invoices, it was wholly impractical and quite unreasonable to expect the recipient-company to go behind the said documents, examine the actual procurement of goods from the concerned manufacturer and establish transportation of such goods from the factory premises or godown or other premises of the concerned manufacturers up to the premises of the concerned dealer and then to the recipient's premises. During the course of investigation, statements of the owners of few vehicles were recorded, who stated that they had not transported the said goods. However, most of these statements of the vehicle owners were recorded after 3-4 years of the events. Further, these persons from whom statements were recorded, are the owners of the transporting vehicles and no statement from the drivers of the said vehicles have been recorded in this case - Moreover, the above vehicle owners were required to be questioned during the course of investigation as to whether they were driving the said vehicles for transportation of goods during the impugned period or not. If these owners of the transporting vehicles were found to be driving the vehicles during the said period, only in that case and if not proven otherwise, the statements recorded from such transporters may be admissible, although not conclusive. In these circumstances, we find that the CENVAT Credit availed by the appellant no. 1 cannot be denied. Mere recording statements from transporters/vehicle owners, with regard to few invoices, cannot be the reason to deny the whole of the CENVAT Credit availed by the appellant-company. The Revenue has also failed to bring on record as to from where the appellant-company procured the inputs, as it is the claim of the appellants that the inputs procured by them have been used in the manufacture of their final products, which have finally suffered duty - the CENVAT Credit cannot be denied to the appellant. Extended period of limitation - HELD THAT:- The appellant-company had purchased its requirements from M/s Vikash Industrial Corporation without any notice or knowledge of its internal workings and nothing was brought to our attention wherefrom it may be concluded that it had reason to doubt the genuineness of the supplies effected by the said Vikash Industrial Corporation. Receipt of the disputed inputs stood duly evidenced by the appellant-company's receipted challans, stores receipt vouchers and stock ledgers and the appellant-company throughout maintained its stand that without receiving such inputs, it would not have been possible to manufacture finished goods subsequently cleared to the Indian Railways on payment of appropriate duty - the extended period of limitation cannot be invoked without specific and concrete findings of fraud, suppression or willful misstatement. Penalty - HELD THAT:- As the availment of CENVAT Credit is regularized, therefore, no penalty is imposable on the appellants. Conclusion - i) The Revenue failed to bring on record any evidence to show how the appellant-company could have manufactured the finished goods without receipt of inputs, which were duly accounted for in the appellant's records. Credit cannot be denied. ii) The extended period of limitation cannot be invoked without specific and concrete findings of fraud, suppression or willful misstatement. The mere general observation by the adjudicating authority is insufficient. iii) As the availment of CENVAT Credit is regularized, therefore, no penalty is imposable on the appellants. Appeal allowed. Case-Laws Central Excise Fri, 02 May 2025 00:00:00 +0530