AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 652
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....he matter has been remanded back by the Hon'ble High Court primarily for the reason that the Tribunal has not examined the various grounds urged by the Appellant and by the department. It has been held by the Hon'ble High Court that the Tribunal could not have straightway followed its earlier order dated 25-10-2019. In such circumstances, it goes without saying that the Tribunal has to record reasons as to how the decision would cover the case before it. In other words the Hon'ble High Court has observed that the order of the Tribunal is a non-speaking order. 3. That the Commissioner of Central Excise, Bolpur vide Order-in-Original No. 115/Commr/Bol/2009 dated 31-12-2009 had confirmed duty demand of Rs. 3,07,48,020/- and had imposed equal amount of penalty. A separate penalty of Rs. 50,000/- was imposed under Rule 13(1) of Cenvat Credit Rules, 2002. The period involved is from May 2003 to June 2008 and the show cause notice was issued on 04-122008 under extended period of limitation. 4. Briefly stated the facts of the case are that the Appellant is engaged in the manufacture of various iron and steel products falling under Tariff He....
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.... the said M/s. AESPL nor had any business relation or financial transaction with the said M/s. AESPL. The other purported job workers, Sri J.P. Gupta also made identical submission in his statement dated 10-10-2006. 8. That on 30-06-2008 a team of Central Excise officer of Anti Evasion Unit visited the factory premises of the Appellant and conducted search and subsequently recorded two statements of Shri Niranjan Gourisaria, Senior General Manager of the Appellant dated 21-08-2008 and 28-11-2008 as well as statement of Shri Umesh Rai, Project Manager of the Appellant dated 28-11-2008. 9. That on the basis of various evidences a show cause notice dated 04-12-2008 was issued to the Appellant wherein it was alleged that the entire transaction was conducted with M/s. AESPL was on paper only with an ulterior motive of availing wrong and irregular Cenvat credit without accompaniment of any physical material said to be manufactured by the said M/s. AESPL. It was alleged that the Appellant had willfully and deliberately indulged in suppression of material fact from the department of non-receipt of Capital Goods namely machine & mechanical appliances from the so ca....
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....s equipments etc had been classified under 84791900 or 8479.19 as per invoices. But as per Central Excise Tariff Act 1985 as amended there was no Tariff sub Heading No. 84791900. The sub heading 84791000 reads "Machinery for public works, buildings or the like". Further in the photographs cited by the Appellant were very large operative instruments with label of M/s. AESPL. On close observation it happened that the instruments were very large in size and were fabricated within the factory premises by plates, angles, channels etc. But in the invoices, he found that there was no evidence that these plates, angles etc were carried to the factory, nor there was evidence that the part of such machines were carried in piecemeal manner and assembled at site. He found that in the invoices there were descriptions of complete machines or machinery appliances sent to the Appellant in Nos. or in sets. Further he also found that in the contracts submitted by the Appellant he did not find any such contract for assembly of machines at site. Further, the Central Excise Registration of M/s. AESPL had been terminated on 10-08-2007 by ....
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....sions:- (i) The plant and machinery on the strength of 199 invoices were duly received by them, the same were duly entered into in their statutory records, the payment for the said purchases were made through banking channels and the said plant and machinery was duly installed in their factory. In this regard, he took us through copies of the quotations, purchase orders, challans, invoices, ledger accounts, bank statements and ER-1 returns of the disputed period in support of the aforementioned submission. (ii) That M/s. AESPL was duly registered with the Central Excise department for manufacturing of excisable goods. Though there was an allegation in the show cause notice and finding in the Order-in-Original that Central Excise registration of M/s. AESPL was terminated on 10-08-2007 vide Order-in-Original but the same was set aside by the Commissioner (Appeals) on 2210-2008. The period of dispute in the present case is May 2003 to June 2008. In this regard, he submitted that in the first place the said termination on 10-08-2007 was at the fag end of the period in question. Secondly, this fact was not known to the Appellant as M/s. AESP....
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....8. He showed us a chart which contained the order wise purchase of 199 consignments according to which from 21-06-2008 to 2806-2008 they had received 28 consignments of different parts of plant and machinery and two consignments were received on 30-06-2008. According to him non-inspection and non-verification of the plant and machinery clearly falsifies all the allegations and findings that no plant and machinery was received from M/s. AESPL. (vi) That during the course of investigation the officers had recorded two statements of Shri Niranjan Gourisaria, Senior General Manager of the Appellant dated 21-08-2008 and 28-11-2008. In both of these statements Shri Niranjan Gourisariawas simply shown the various invoices on the basis of which they had availed the cenvat credit issued by M/s. AESPL and also a detailed chart of all the invoices under which the Appellant had received various capital goods. He was simply asked to explain what necessary steps did he take to ensure the identity and address of the supplier i.e. M/s. AESPL as stipulated vide Rule 7(2) of Cenvat Credit Rules, 2002 / Rule 9(3) of Cenvat Credit Rules, 2004. His answer was that he did....
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....he department was accepting the payment of central excise duty from M/s. AESPL. If the allegation of the department was true it should have cancelled the registration of M/s. AESPL and should not have allowed them to clear any further consignments. But the department never objected to their clearance of capital goods on payment of appropriate central excise duty. On the contrary the department was duly accepting the payment of central excise duty by M/s. AESPL during the period in question which itself is sufficient to falsify the case set up by the department against the Appellant. (ix) That, the capital goods were duly accompanied by the Tax Invoice-cum-Excise Invoice on which vehicle number on which these capital goods were transported was duly mentioned on the said Tax Invoice-cum-Excise Invoice. No inquiry at all was conducted either from the owners of the vehicles or its drivers to prove that these capital goods were not transported to the premises of the Appellant. (x) That once the department had collected appropriate central excise duty from M/s. AESPL at the time of clearance of the capital goods they cannot subseq....
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....ng authority cannot go beyond the scope of the show cause notice and cannot set up a new case against the assessee. In fact all these facts should have been verified during the investigation when the officers had visited their unit on 30-06-2008. In this regard he took us through tax invoice-cum-excise invoice whenever the goods were cleared from the factory of M/s. AESPL. The said party was issuing one tax invoice-cum excise invoice for a particular consignment. He showed us the cases where though there was one tax invoice but it covered three different consignments. For example tax invoice dated 26-122003 was a consolidated invoice which was for three consignments whereas it contained the details of three vehicles whereas three excise invoices were issued for each of the consignment which was a coal crusher part. A perusal of various documents such as quotations, purchase orders, challans and invoices would duly prove that the capital goods or its parts were in a fully finished condition. (xiv) That the Appellant in its written submissions filed at the time of personal hearing in para 1(i) had taken a specific stand before the Ld. Commi....
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....sionerate where the present unit of the Appellant is located. This Tribunal in para 6 of the said Final Order had categorically laid down that the department did not submit anything to controvert the contention of the Appellant that they availed cenvat credit on the basis of invoices issued by the manufacturer having Central Excise Registration. They had paid the amount by Account Payee Cheques and the machines are in existence in the factory of the Appellant. The Tribunal in the case of Sunvik Steels Ltd has allowed the appeal of the assessee in respect of goods supplied by the same supplier. In the said judgment reliance was also placed on the judgement rendered by the Hon'ble High Court of Allahabad in the case of C.Ex., Cus. & Service Tax Vs. Juhi Alloys Ltd : 2014 (302) ELT 487 (All.). Similarly in this judgment reliance was also placed on the law laid down by the Jharkhand High Court in Commissioner of C. Ex., East Singhbhum v. Tata Motors Ltd. - 2013 (294) E.L.T. 394 (Jhar.). It has been contended by the Ld. Counsel that the Final Order No. 77032/2019 dated 25-102019 in respect of M/s. Jai Balaji Industries Limited was never ch....
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....fter analyzing the entire evidence set aside the impugned order and allowed the appeal both on the ground of merit and on the ground of limitation. It has been contended that though this order was passed more than one year back but the same has not been challenged before the Hon'ble High Court and, therefore, has attained finality. (xxi) That the Appellant cannot be denied the cenvat credit on various capital goods as M/s. AESPL had duly discharged central excise duty while clearing their capital goods and the said central excise duty has been accepted by the department. (xxii) That the Appellant was erroneously called upon to give answer to the allegations which were basically levelled against M/s. AESPL without making them the party to the present proceedings. (xxiii) That on 30-06-2008 a team of Central Excise officer of Anti Evasion Unit visited the factory premises of the Appellant and no discrepancy was found at the end of the Appellant that they had erroneously availed the cenvat credit. Even in the show cause notice no such evidence has been brought on record that they did not receive the capital goods from M/s. AESPL or did not install t....
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....nbsp; channels by the buyers. In such a case it could not be held that such invoices were fake. It has further been held that credit taken by assessee was not required to be reversed more so when the recipient unit was not alleged to be party to fraud. In this regard, the Ld. Counsel placed reliance on the law laid down by the Hon'ble Gujarat High Court in the case of Prayagraj Dyeing & Printing Mills Pvt Ltd Vs. Union of India reported at 2013 (290) ELT 61 (Guj). According to Ld. Counsel, similar law has been laid down in the following judgments:- (i) Minakshi Fashions Pvt. Ltd., Vs. CCE & Cus. Surat - 2015 (322) ELT 174 (Guj.) (ii) Tarsen Polyfab Pvt. Ltd. Vs. CCE Noida - 2011 (264) ELT 225 (Tri-Del) (iii) Indo Asian Fusegear Ltd. Vs. CCE Noida - (338) ELT 611 (Tri-Del) (xxvii) That the capital goods received by the Appellant from M/s. AESPL were duly shown in the statutory records of the Appellant. There is no finding by the Adjudicating Authority that the statutory records which were maintained by t....
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....(ii) The photographs cited by the Appellant showed that the instruments/machineries are large ones with label of M/s. AESPL. Such large machineries needed to be fabricated in the factory premises with plates, angles, channels etc. but there stood no evidence that such plates, angles, brought to the factory premises for fabrication. There was also no such evidence that those machineries were brought in piecemeal manner and assembled at factory premises. (iii) That central excise registration of M/s. AESPL was terminated on 10th August, 2007 by the concerned divisional Officer and the Appellant was aware of it as is evident from para 2.8 of the Order-in-Original. The Commissioner (Appeals) remanded the matter by his order dated 22-10-2008. During this intervening period of more than one year, M/s. AESPL continued to issue invoices to the said assessee. During the said period M/s. AESPL ought not to issue any Central Excise invoice and the Appellant knowingly availed the Cenvat credit on such invoices. (iv) That all the invoices were fake and on the strength of such fake invoices the Appellant took cenvat credit. This fact was ....
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.... has been laid down that the department cannot travel beyond the scope of show cause notice and that the Revenue cannot argue the case which has not been made out in the show cause notice. 19. We find that the officers of Anti-Evasion Unit visited the factory premises of the Appellant on 30-06-2008 and conducted search operations. No panchnama has been brought on record as to whether any inspection was made of the capital goods which the Appellant had received from M/s. AESPL right from the financial year 2003-04 onwards and upto 30-06-2008. As stated above, during this period, the Appellant had received capital goods vide 199 invoices. Even on 30-06-2008 they had received two consignments. In fact, from 2106-2008 to 28-06-2008 they had received 28 consignments of different types of capital goods. It cannot be denied that the capital goods are necessarily to be installed in the manufacturing premises and the fact of such installation can be easily identified. We are totally at loss to understand as to why the officers of the Anti Evasion Unit did not inspect the said plant and machinery and find out whether the same were lying installed in....
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....the capital goods. In this regard, we have gone through the two judgments of the Hon'ble Supreme Court relied upon by the Ld. Counsel in the case of Uniworth Textiles Ltd Vs. Commissioner of Central Excise, Raipur reported in 2013 (288) ELT 161 (SC) and Kishanchan Chellaram Vs. Commissioner of Income Tax, Bombay reported at 1980 (SUPP) SCC 660. In both these judgments rendered by the Hon'ble Supreme Court it has been held that the burden of proof is on the person who makes the allegation and not vice versa. Further the Hon'ble Punjab & Haryana High Court in the case of CCE, Chandigarh Vs. Neepaz Steels Ltd reported in 2008 (230) ELT 218 (P&H) has categorically held that if the payments for the purchase of inputs were made through Cheques or Demand Drafts and the department was not able to prove that any other alternative raw material was received and used in the final products, Cenvat credit cannot be denied to the manufacturers. This judgment has been upheld by the Hon'ble Supreme Court. Though this judgment is in respect of inputs but the same would be duly applicable in respect of capital goods. We hold that the present....
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....legations of the department are true it should have terminated their central excise registration forthwith and should not have accepted the payment of duty and the ER-1 returns on the part of M/s. AESPL. It is strange and perplexing that even after knowing on 02-03-2006 that M/s. AESPL did not have requisite manufacturing capability to manufacture capital goods it allowed them to clear the capital goods for more than two years and three months and conducted search operations in the factory of the Appellant only on 30-06-2008 It would clearly show that the department itself was not convinced about the allegations they have made in the show cause notice and thereafter it took them around two years and nine months to issue the show cause notice on 04-12-2008 to one of the recipient units i.e. the present Appellant. 23. The Ld AR contended that the central excise registration of M/s. AESPL was terminated on 10-08-2007 and Appellant was aware of it and has relied upon para 2.8 of the Order-in-Original in support of this contention. According to Ld. AR M/s. AESPL ought not to issue any Central Excise invoice and the Appellant knowingly availed the Cenvat credit o....
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....n the arguments of Ld. AR that the Appellant could not have availed the Cenvat credit post 10-08-2007 and that they were aware about the termination of central excise registration of M/s. AESPL by the department. 24. We find that the capital goods were duly cleared on the strength of the duty paid central excise invoices in which the payment of central excise duty was prominently shown. The vehicle number on which the capital goods were transported were also duly mentioned in each of the central excise invoices. The payments were made by the Appellant to M/s. AESPL through banking channels. In this regard we have gone through the party ledger account and bank statements of the Appellant pertaining to M/s. AESPL. The department did not conduct any inquiries from the transporters to substantiate their allegation that the goods were never manufactured by M/s. AESPL and never supplied to the Appellant. We are of the firm view that the transporter is an important and independent link as without the participation of the transporter the goods cannot be transported from the factory of the supplier to the factory of the recipient. Further there is ....
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....peal of the assessee in respect of goods supplied by the same supplier. We also find that this issue was also before the Hon'ble High Court of Allahabad for consideration in the case of CCEx., Cus. & Service Tax Vs. Juhi Alloys Ltd : 2014 (302) ELT 487 (All.) wherein the Hon'ble High Court held as under : "7. In the present case, both the Commissioner (Appeals) and the Tribunal have given cogent reasons to indicate that the assessee had taken reasonable steps to ensure that the inputs in respect of which he has taken the cenvat credit are goods on which the appropriate duty of excise, as indicated in the documents accompanying the goods, has been paid. Admittedly, in the present case, the assessee was a bona fide purchaser of the goods for a price which included the duty element and payment was made by cheque. The assessee had received the inputs which were entered in the statutory records maintained by the assessee. The goods were demonstrated to have travelled to the premises of the assessee under the cover of Form 31 issued by the Trade Tax Department, and the ledger account as well as the statutory records establish the receipt of the goods. In such a situation, it woul....
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....allowed the appeal of the party. This Tribunal also placed reliance on the law laid down by Hon'ble the High Court of Allahabad in the case of CCEx.,Cus. & Service Tax Vs. Juhi Alloys Ltd. 2014 (302) ELT 487 (All.). That from the remand order of the Hon'ble High Court it has come on record that this order was not challenged by the department before the High Court under Section 35G of the Central Excise Act on account of low tax effect but that fact is not sufficient to not follow the said judgment. We find that the above judgment has attained finality. 26. We also find that apart from the case of Sunvik Steels Ltd, supra, another case where M/s. AESPL had supplied the capital goods came up before the Delhi Bench of the Tribunal in the case of Commissioner of Customs & Central Excise, Raipur Vs. Satya Power & Ispat Pvt. Ltd reported at 2013 (294) ELT 524 (Tri.-Del). That unit had also procured the capital goods from M/s. AESPL. The Tribunal in their order held that since the capital goods in question was in possession of the respondent even at the time of visit of the Revenue officer, therefore, the credit was correctly availed ....
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....herein it was not possible for them to consume such huge quantity of inputs and to manufacture and clearance of finished goods. It has been held that the Tribunal was not deciding the case of M/s. Saha Industries. In this case the Tribunal was concerned with the issue as to whether when a supplier was duly registered with the Central Excise department and had paid Central excise duty on the capital goods and cleared the same from his factory. In such a situation cenvat credit on the same can be denied to the recipient of the capital goods. (v) That it could not be disputed that M/s. Saha Industries was paying central excise duty to the department as was evidently clear from perusal of 48 tax invoices which were issued by M/s. Saha Industries under Rule 11 of Central Excise Rules. This would mean that M/s. Saha Industries was duly following all the Central Excise procedure in maintaining statutory records and filing ER-1s returns. (vi) That while recording the statement from the Prop. of M/s. Saha Industries he has never stated that he did not supply various capital goods to M/s. JBIL (Unit-IV). (vii) The Tribunal followed its earlier ....
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...., prima facie, appear to be genuine. The fact that the assessee made payment by cheque was held to be a proof of his bonafides. We tend to fully agree with the Ld. Counsel that the judgment of the Hon'ble Allahabad High Court in the case of Juhi Alloys Ltd, supra, is applicable on all fours to the facts of the present case. 30. That we agree with the Ld. Counsel that no evidence has been brought on record that various statutory and financial records maintained either by M/s. AESPL or by the Appellant were not found to be false or incorrect in any manner. According to Ld Counsel it is a well settled law that Accounts regularly maintained in the course of business are to be taken as correct unless there are strong and sufficient reasons to indicate that they are unreliable. In this regard Ld. Counsel placed reliance on the judgment of the Apex Court dated 08-01-2013 in the case of M/s. Gian Chand & Brothers and Another Vs. Rattan Lal @ Rattan Singh in civil appeal No. 130 of 2013 wherein in para 28 of the judgment this principle has been laid down. 31. We also find that, it is also a well settled law that the recipient of inputs....