TaxTMI 
TaxTMI 
2019 (7) TMI 5
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....r Ingots from M/s AIPL and availed credit on the strength of invoices issued by M/s AIPL. The transporter Shri Indrajit Singh of Satkar Tempo Transport Union denied transportation of goods and as per Check-post reports of Commercial Tax Department, the goods did not pass through the check post. M/s AIPL has only issued invoices to enable the buyer to avail cenvat credit and to camouflage such transactions, cheques were taken from the buyers, which were deposited by M/s AIPL. The show cause notice had also relied upon the case against M/s AIPL for fraudulent availment of cenvat credit, for which SCN dated 14.5.2007 was issued to them. A Show Cause Notice F. No. DGCEI/AZU/36-42/2007-08 dated 5.10.2007 proposing denial of cenvat credit of Rs. 64,57,520/- was also issued to the Appellant on the ground that they had availed cenvat credit on the basis of bill of entry showing import of re-melted Copper Ingots / Wire Bars of Sri Lankan origin cleared from ICD, Tuklaqabad, New Delhi, which were not received in their factory. The Appellant has shown the purchases on high sea sale basis from M/s Vipin Enterprises, M/s Dinesh International Pvt Ltd, M/s Bhagyodaya Sales Ltd, M/s Bhagwati Metal....
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....i office and not from Delhi or UP border offices. From the dates of the LRs, which shows that the vehicles were actually available elsewhere on either check-post of Gujarat State and hence could not have been used for transportation of Copper Ingots from Delhi to the factory premises of the manufacturers. The investigation at Bajrang Transport Co. revealed that the said transport does not exist, which implies that no goods were transported. It also revealed that in case of one of the consignments of 26,440 kg of the consignment was shown to have been transported by M/s Bajrang Transport vide LR dated 20.01.06, however the very consignment was also shown to have been transported by M/s Choudhary Transport Co from ICD, Tukhlaqabad, Shahdara on 18.1.2006, which clearly shows that the credit availed by the appellant was without actual receipt of goods and the LRs issued by M/s Bajrang Transport were either bogus or fabricated. The LR showing transportation of 26 MT cannot be transported through a truck and it will take around 6 days for a trailer to carry a container from Delhi to Kalol and back to Delhi. On enquiry at M/s Skytrain Services, it was revealed that 4 of the containers wer....
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....nt cenvat credit. The Revenue has though relied upon the Show Cause Notice dated 14.5.2007 issued to M/s AIPL by the Commissioner, Ludhiana, but even if M/s AIPL had no Ingot manufacturing machinery or insufficient electric consumption still when the goods has been received by them and no discrepancy was found at the Appellant's end, the credit is available to them. The director of Appellant concern Shri V.K. Gupta in his statement has confirmed that the RG-23 A (Part I & II) and excise under Rule 7 Report of 2003-04 are correct. He also produced party-wise ledgers of M/s AIPL and clarified the discrepancies. He also confirmed that he has received the goods by placing order and paid all inclusive charges to M/s AIPL and received the goods in his factory, though he was not aware of any transporter or how M/s AIPL had transported the goods to their premises. That he did not comment on the report of the Transport Commissioner evidencing that none of the vehicles had passed through the check-posts, and has paid an amount of Rs. 25 lakh "Under Protest". He submits that since the Appellant has received the goods, therefore credit cannot be denied to them on the basis of any adverse situa....
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....e of transporters M/s Bajrang Transport Co, no investigation was conducted at the said transporter and more on the report of the Dy. Director, MCD, Sanjay Gandhi Transport Nagar, it was contended that no transporter at Plot No. AW-270, Sanjay Gandhi Transport Nagar existed. The adjudicating authority has relied on para 14.6 regarding anomaly in date of entry in RG-23A, Part-I showing receipt on 19.1.06 against the date of LR as 20.01.06 in respect of one of the 4 consignments handled by M/s Bajrang Transport, who alleged that the consignment was not received in the appellant's factory, which is not correct. The same was merely a clerical mistake of concerned clerk since the consignment entered Gujarat from Shamlaji check post dt 24.1.06, as is evident from the stamp affixed on LR, and therefore, the Appellant could not have received the goods on 19.1.06. 7. In respect of show cause notice dt 4.1.08 wherein a credit of Rs. 1,31,95,706/- has been denied on goods said to have been purchased from M/s Vaishnudevi Metals, Jammu. He submits that the adjudicating authority has relied upon the allegation of show cause notice that the LRs of transporters showing goods from Delhi to Kalol we....
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....nt. No driver was interrogated. The show cause notice has contended that the cheques issued by the Appellant were deposited by M/s AIPL in different accounts and were withdrawn and further that the entries in such bank accounts of AIPL revealed that no payments were made to raw material suppliers. The Ld. Counsel also submits that Shri V.K. Gupta in his statement has categorically stated that no advance payment was made to AIPL when goods were received on credit. All inclusive payments were made after receipt of goods and they do not have any concern if the AIPL has withdrawn cash against the appellant payment made through cheques. It is not established in the investigation that M/s AIPL did not pay raw material suppliers any cash. The proprietor of AIPL was not questioned, therefore, whether the goods supplied by M/s AIPL to the appellant were manufactured by themselves or supplied as a result of trading. Without ascertaining these facts, it cannot be assumed that the goods were not supplied by M/s AIPL and / or not received by the appellant. The adjudicating authority has also relied upon the investigation made by the jurisdictional central excise commissioner at Ludhiana, wherei....
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..... He points out that out of the 32 consignments, i.e. 12 in case of show cause notice dt 5.10.2007 (pertaining to imported goods) and 26 trucks in case of show cause notice dt 4.1.08 (originated from Jammu), 24 trucks were stamped at the check-post. However, even as per check-post record, these trucks have not entered, which clearly shows that the report of the Transport Department is not reliable. He further submits that if the owners of the vehicle has denied deployment of vehicles for transportation of goods from Delhi to their factory, the same cannot be considered as ground, since the transporters were not appointed by them. There is no evidence about goods purchased on high sea sales basis as to where the imported goods have gone after they were taken to places in and around Delhi by local transporters after clearance from ICD, if they were not transported to their factory. Who were un-known buyers of the imported Ingots allegedly having factories at Delhi / UP borders, who were the un-known suppliers / sellers of alleged non-duty paid scraps from whom the appellants purchased ingots to fill in the gaps, which transporter issued fake LRs on commission basis without transporti....
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....m its records. 10. Shri A. Mishra Ld. AR appearing for the Revenue supports the findings of the impugned order and relies upon the investigations made at the end of the transporters and CHAs. He submits that since the goods were not received in the Appellant's factory, the credit has been rightly denied. 11. Heard both the sides and perused the records. We find that the demand of Rs. 18,39,876/- has been made on the ground that the Appellant has availed credits on the basis of invoices issued by M/s AIPL, Ludhiana. Reliance has been placed upon the transporters who refused transportation and reports from check-posts of Commercial Tax and Transport Departments. The show cause notice also alleged that M/s AIPL had deposited payments in their bank accounts received from the appellants, but the same were withdrawn in cash. Reliance has also been placed upon the show cause notice issued to M/s AIPL by the Commissioner, Ludhiana. Similarly, in case of demand of Rs. 64,57,520/-, the imported goods, which were purchased by the Appellant on high sea sale basis from Sri Lanka were alleged to have not been received and credit was availed without receipt of goods. The demand is based on the ....
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....he transporters. We find that though the reports from transport or commercial department check post states that the goods did not crossed the border posts, however in case of 24 trucks the documents bears stamp of check post. Thus for the reasons that the LRs do not bear the check-post stamp, it cannot be concluded that the goods did not pass through the transit state. The third party records, i.e. transporters record or their statements, cannot be made basis for alleging contravention by the Appellant. In a plethora of cases relied upon by the appellant, it has been held that the statements of transporters being merely third party / co-accused cannot be solely relied upon to confirm serious charges and merely because the said check-post records do not show movement of vehicles from its record. 13. The Revenue has also alleged that the payment received by the sellers / suppliers of the goods were received back by the appellant. However, there is no evidence of flow back of funds to the appellant. There is no whisper about the person who has given any amount on such alleged fictitious purchases back to the appellant nor any evidence of such flow back has been found. The appellant h....
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....therefore no investigation was conducted related in those invoices. I am of the view that the investigation was conducted on the basis of LRs and not on the invoices. The three LRs which were taken up for investigation covered the goads in question and it was proved that the vehicles and goods shown in the LRs were not transported at all from Delhi. Therefore, I do not find any merits in the argument of the first respondent that the demand for those two invoices should be dropped. The contention of the first respondent on the grounds of payments to the second respondent and to the transporters has lost its sanctity in light of every evidence leading to a conclusion that the goods in question were never transported from Delhi and not received by the second respondent. The first respondent cannot escape their liability under a ground that they were not punishable for lapse on the part of the second respondent. It was proved beyond doubt that the act of the respondents was with intent to avail Cenvat credit fraudulently and the first respondent was also part to it. The decisions relied upon by the first respondent in this regard are either not akin to the facts and circumstances of th....
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....r showed that the goods were of miscellaneous nature and not copper. I find that apart from the above, there is no other evidence to reflect upon the fact that the inputs were not actually received by the appellant. In the present case, there is no dispute that the LRs were issued by the transporter showing the appellant as the consignee of the goods. However, Revenue has based his case on the Goods Register maintained by the transporter indicating the description of the goods as 'Miscellaneous'. This fact, by itself, cannot be held to be sufficient for arriving at conclusion that the inputs were never transported to the appellant's factory. All the documentary evidence on record supports the appellant's case about the receipt of the input whereas there is no independent corroborative evidence by the Revenue produced on record. (ii) The above findings find support from the Tribunal's order in case of M/s. Ajay Industrial Corporation v. CCE, Delhi - 2009 (237) E.L.T. 175 (Tri.-Del.) as also from the Tribunal's decision in case of M/s. Shree Jagdamba Castings (P) Ltd. v. CCE, Bhopal, 2006 (206) E.L.T. 695 (Tri.-Del.). It has been held in said judgments that the credit availed....
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...., at Nadiad. According to M/s. Pranav Metal Mart, the goods so transported have in fact been received by it under proper invoices. It is also the say of M/s. Pranav Metal Mart that the goods were sold to the assessee and it is the case of the assessee that such goods were received by it along with invoices. Para 5. A perusal of the order passed by the adjudicating authority indicates that the officers at the check post had entered the receipt of copper ingots in their record. Thus, even the official records maintained at the check post indicate receipt of copper. Merely because in the record of the transporter, two types of LRs had been issued in respect of the goods carried/transported by M/s. Singal Road Carriers which indicated transportation of miscellaneous goods and the other which indicated transportation of copper ingots/wire brass, the Department has jumped to the conclusion that copper ingots had not actually been transported. Except for the aforesaid evidence, there is no evidence whatsoever to indicate that M/s. Pranav Metal Mart, Nadiad had not received copper ingots or that the respondent assessee had not received the ingots along with the invoices. The statement of....