TaxTMI 
TaxTMI 
2015 (2) TMI 649
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..../s Jayashree Concast Pvt. Ltd. is hereinafter referred to as 'JCPL or assessee no. 2.' 2. The brief facts are that Jay Iron has its factory at village Kharsundi, Dist. Raigad and is registered with the Central Excise department and engaged in manufacture of steel ingots falling under Chapter Heading 7206.00 and Runner and Riser falling under Chapter Heading no. 7204.00 of the first schedule to the Central Excise Tariff Act, 1985, whereas the respondent JCPL, is situated at Vill. Dheku, Dist. Raigad and also registered with the Central Excise department and engaged in the manufacture of non-alloy/steel ingots faling under Chapter Heading 7206.00 and Runner and Riser falling under Chapter Heading no. 7204.00 of the first schedule to the Central Excise Tariff Act, 1985. The respondents during the period of dispute have availed CENVAT Credit on various inputs including MS scrap purchased from dealers/suppliers including M/s Simandhar Steel Movers (I) Pvt. Ltd. (SSMPL for short) and M/s Simandhar Enterprises (S.Ent. in short). Both are first stage dealers under the Central Excise Act and Rules thereunder. The show-cause notices dated 2.11.2005 to Jay Iron and 22.2.2006 to JCPL (f....
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....Tri-Mum) is also not applicable in this case because the vehicles used in the said case were for transportation of goods whereas in this case the vehicles used are for transportation of passengers. Further, the transport agencies in the case of Lloyds Metal (supra) have come forward and claimed the receipt of an amount on account of transportation of goods. Also, the 'Cost Audit' appointed by the Commissioner also show physical receipt of inputs. But in this case there is no such evidence to prove that the goods have actually been transported. (c) The issue in the case of Saina Industries Vs. CCE - 2005 (186) ELT 423 (Tri-Mum) were - (i) receipt of sheets and not coils, (ii) non-production of LRs, (iii) non-production of Octroi receipts and (iv) movement of goods weighing 31 MTs through a vehicles of 16 MTs capacity. All these issues were suitably replied by the party as described in the order. Moreover, the department in the said case had interrogated only one dealer/supplier out of 21 different dealers/suppliers and who had also replied that he had supplied the goods and received the payment for transportation of goods. But, in these cases under consideration, Shri Hitesh ....
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....t with reference to these 9 vehicle owners but in view of the bogus transporters proved as the summons issued to them have come back due to incomplete and/or bogus addresses. Also, the vehicle owners who had deposed have confirmed that the goods under reference are not transported by them. (iv) As regards relevance statement of Shri Bhaktiani, owner of truck no. MH04 F9302, it is stated that the said vehicle no. is appearing on invoice no. 1407 dated 20.12.2003 issued by SSMPL and the same is appearing at Sr. No. 72 in annexure B to the show-cause notice.1 (v) As regards confirmation of payment by the dealers to vehicle owners it is not proper to say that the investigating officer did not confirm from the records of the dealers whether the payment was made to the vehicle owners by the dealers. The statements of dealers were recorded but the dealers could not produce a single document or person involved in the transaction pertaining to receipt, storage and clearance of goods from his godown. As neither the dealers have pointed out that the vehicle nos. Mentioned in the invoices were not correct nor the assessees have pointed out that the vehicle nos, were incorrect. If the veh....
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..../EB/C-II dated 14.7.2014, where in case of purchase of inputs being MS scrap supplied by registered dealers through brokers, by claiming it to be manufactured scarp, on which excise duty was paid and the CENVAT Credit was availed, it was alleged by the Revenue pursuant to its inquiry that Steel India have actually been supplied with bazaar scrap and not industry generated scrap. It was held that the Revenue need not prove its case with mathematical accuracy and it is sufficient if the Revenue, as regards the presumption as to the existence of a fact raised against the assessee, that an input have not been transported to its factory, it is reasonable to say the Revenue has discharged its onus in the case with substantial accuracy, and the Tribunal upheld the disallowance of CENVAT Credit. The Revenue further relies on the third Member ruling of this Tribunal in the case of Bhagwati Steel Cast Ltd. Vs. Commissioner of Central Excise - 2013 (293) ELT 417 (Tri-Mum), wherein CENVAT Credit was availed on the basis of duty paying document originated from the ship breakers in Gujarat. By majority view, in view of the facts that some of the vehicle numbers, used for transport of the inputs ....
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....7th Nov 2003, of Asstt. Comm. Of Central Excise Mulund, that the two dealers (suppliers) have committed some fraud, Central Excise officers attached to Raigarh Commissionerate investigated the case. During investigation the Assessee submitted Cenvat Invoices, Goods Receipt Notes, L R copies and Balance Sheets (Para 10 of the Show Cause Notice). 4.3 There was no doubt about the genuiness of the invoices as the said 146 invoices are duly issued by the supplying dealers and supplied along with the scrap material which was duly received in the factory. The transport was arranged by the Dealers and the material was taken delivery by the Respondent at the factory gate and Goods Receipt Note (GRN) prepared. The payments for the purchase of material and the duty amount indicated on the invoices issued by the two dealers were made through a/c payee cheques to the two dealers. 4.3 That Show Cause Notice dated 31/10/2005 (to Jaishree iron) issued by the Department was confirmed by the Learned Additional Commissioner of Central Excise. The Order in Original has been set aside by the learned Commissioner of Central Excise (Appeal). 4.4 That in the case of M/s. Bhagwati Steel Cast Ltd -....
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....rounds that summons issued to transporters could not be served. 4.5 The respondent submits that one of the reason, in M/s. Bhagwati case, for denial of credit is that the employees have stated that no such credit is received. Whereas in the respondent's case, the Director Mr B.B. Singh and one Mr. Kishan Daga, Employee, have stated that they placed order for steel scrap and also received steel scrap. This fact has been discussed by the Ld Commissioner in the impugned order. 4.6 In the case of the respondents, the summons were issued to the transporters and only six attended and denied the transport of scrap to the respondent's factory. Respondent submits that they have received the material at factory gate as per the contract and also it was established by the statement recorded, whereas the respondents representative had stated that the transport was arranged by the supplier and that they have taken care that the goods were supplied as described in the invoice and that transport copy of invoices accompanies the goods. 4.7 In the Bhagwati case, the vehicles shown in some invoices are found to be non transport vehicles like passenger vehicle etc. In the respondent&#....
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..... Respondents had no knowledge of any alleged wrong doings by the supplying dealers. The respondents have acted have acted in good faith and had no occasion to doubt the duty paid nature of goods (Input) received. 4.9 In the case of M/s. Bhagawati, the argument of the assessee was that the ship breaking scrap is re-rollable scrap and the same can be used in the manufacture in their factory. However, in respondent case, there is no such ship breaking scrap in dispute. The findings, in the order in original, are with regard to same number of invoices (parallel invoices) being issued by the supplying dealers and that a few transporters (say 5 out of 150 approx.) have not confirmed the transaction. 4.10 The respondents submit that they have purchased the material on regular basis during October 2000 to Feb 2004. It appears from records that a show cause notice NO. V/PI/30-29/MDB/01 dt/. 19/01/2004 had been issued by the Revenue to the supplying dealers and that department was aware of the alleged activities of the two dealers since 2001, but did nothing to prevent the two dealers from the alleged unfair practices, if indeed the two dealers were so engage. 4.11 The respondents ....
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....tatutory records i.e. RG23 Part - I and II. Respondents would like to draw the Tribunal's attention to C.B.E.C. Circular no. 766/82/2003-CX., dated 15-12-2003, wherein at Para 5 and 6, this aspect is dealt with as below: "On the issue of availment of credit by the user-manufacturer, it is clarified that action against the consignee to reverse/ recover the CENVAT Credit availed of in such cases need not be resorted to as long as the bonafide nature of the consignee's transaction is not in dispute. In case the manufacturer-supplier has received payment from the buyer (including the amount shown as duty of excise) i.e., the person taking CENVAT Credit has made payment of the invoice amount, action should also be taken against the manufacturer-supplier under section 11D and 11DD of the Central Excise Act, 1944." 4.18 Respondents further submit that when duty paid on its finished product is not questioned by the Revenue, then it leads to inevitable conclusion that the Revenue is accepting the fact of receipt of raw material in the Respondents factory premises out of which finished goods were manufactured. In the absence of any contrary evidence adduced by the departm....
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.... relevant to mention that no such provision is there in the Central Excise Act and Rules. In case, the duty recoverable is not paid to the Govt Treasury by the seller, the same is required to be recovered from the seller & not from the purchaser. 2003 (153) ELT 114(Tri) - R.S. Industries 2006 (74) RLT 402 (T) - Spic Pharmaceuticals Division 2006 (74) RLT 810 (T)- Diamond Steel Rolling Mills Ltd. 4.22 Respondents submit that the judgments cited by the Revenue in the Appeal are not relevant to the facts of their Case, and are distinguishable. 4.23 The learned Counsel further relies on the ruling in the case of Motabhai Iron & Ispat Indus. Vs. Commissioner of Central Excise - 2014 (302) ELT 69 (Tri-Ahmd-SMB), where in respect of CENVAT Credit availed the Revenue had alleged that the invoices are bogus and there has been no actual delivery of goods. It has been held that credit cannot be disallowed on basis of statements not corroborated by other evidence or goods not received by the assessee. Invoices issued by registered dealer duly recoded in statutory record books and payment made through Banking channel and there is no evidence that the said amount was a received ba....
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....ices relating to JCPL for the purchases in question, 66 invoices bearing same serial no. (parallel Nos.) had been issued by the supplier SSMPL. Further, summons were issued to all transporters whose vehicle nos. Were appearing in the invoices, but only one appeared and denied having transported the scrap, whereas two other transporters informed by letters that on the said date, their vehicle had been engaged for some other work. Other transporters either did not respond or were not served the summons. Relying on the ruling in the case of Dashmesh Casting Pvt. Ltd. (supra), wherein it was held that non-production of octroi receipt by itself cannot be the sufficient basis to conclude that the goods were not actually transported. It is further laid down in the said Ruling that for minor discrepancies or clerical error in the document, it does not justify drawing of adverse inference that no goods were carried or transported. The said principles have also been reiterated in Saina Industries (supra). In the facts of the present case it is observed that the respondents had nothing to do with the transportation of scrap from Bhavnagar etc. to the dealer's premises and further to their....
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....on receipt of summons and/or summons could not be served. 5.1 The learned Commissioner (Appeals) further observed that it is settled law that substantial benefit granted by the Cenvat Credit Rules cannot be denied on technical/clerical mistake occurred in few invoices after incomplete investigation. Further, one of the reason for disallowance in the adjudication order of Jay Iron, the adjudicating authority relied upon statement of Mr. Kishan Daga, Purchase Officer, who has stated that neither the order was placed for purchase of ship-breaking scrap nor the material was received. The conclusion is incorrect and it is further observed that in reply to question no. 4 and 5, Mr. Daga stated that they have been purchasing scrap from M/s SSMPL for last two years, and they specify the quality of scrap ordered as "not above 3 feet in size and not rusted material". In view of this background the purport of reply given to question no. 16 and 17 was that they had not ordered scrap as ship-breaking scrap or had not ordered specifically for ship braking scarp and the same was not received as ship breaking scrap. This statement was again reiterated in reply to question no. 19, wherein he sta....
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....ed note' and made entries in the statutory records maintained by them. Further, the stock of scrap/physically present in the factory of respondents could have been easily verified with the records which was not done and receipt of the inputs is erroneously being disputed on the basis of the investigation against the supplying dealers, which is found to be wrong and untenable. Further, the investigation is silent as to how the respondent-manufactures, manufactured finished material without receiving the inputs. The law is settled that as long as duty payment is accepted on outputs, the benefit of credit available in law cannot be denied. 5.3 As regards the issue of time bar raised by the respondent, it is observed that the respondent had made full payment of duty indicated in the invoices by cheque, which have been rejected on the ground that it is not established that the payments made to the supplying dealers pertain to the purchase transaction in the question. It is further noted that the respondent - Jay Iron has made payment of more than Rs. 2 crores (approx) over nearly three years to the supplying dealers and the respondent JCPL had also made payment of more than Rs. 2....