TaxTMI 
TaxTMI 
2023 (6) TMI 1152
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....e strength of duty paid invoices and took Cenvat credit on capital goods. The said M/s.Saha Industries was duly registered with the Central Excise Department and was also registered under the West Bengal Value Added Tax Rules, 2005. 2.1 The Officers of the Anti-Evasion Unit, Central Excise, Kolkata-V Commissionerate visited the premises of M/s.Saha Industries on 3001-2008. Various statements of the proprietor of M/s. Saha Industries were recorded. It was gathered by the officers that the unit of M/s. Saha Industries was operating from a small factory of about 300 sq. ft and came to the conclusion that M/s. Saha Industries had poor infrastructure and the auxiliary machinery. Therefore it was not possible to consume huge quantity of inputs and to manufacture huge quantity of sophisticated and automated machinery shown in their finished goods. The statements of some of the transporters were also recorded to substantiate the said allegation. An expert opinion of Chartered Engineer of August, 2008 was also obtained and relied upon. 2.2 As a follow up, the unit of the Appellant was also visited on 0204-2008 and a statement....
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.... recipient of goods as per Rule 9 of Cenvat Credit Rules, 2004; that the goods were delivered through a number of transport agencies most of which were found to be non-existent and others, in their statements, categorically denied any transportation of goods on behalf of M/s.Saha Industries. That as per the statement of Shri Jayanta Kumar Saha, there was no mention of manufacture of goods such as graft, guide box, gear box, conveyor system etc that M/s.Saha Industries was not a manufacturer of excisable goods and invoices raised were false invoices and that no goods manufactured by M/s. Saha Industries were ever received by the Appellant; that M/s. Saha Industries had to reverse a huge amount of Rupees Ten lakhs availed as Cenvat credit on materials which he failed to establish to have been received in his factory for manufacture of excisable goods. 5. We have heard Shri S. Mohapatra (G.M. Accounts) of the Appellant and Shri K. Chowdhury, Ld. Authorized Representative on behalf of Revenue. 6. Learned Authorised Representative for the Appellant advanced the following submissions:- (i) The plant and machinery were duly received....
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....ise invoices to the Appellant without delivering their manufactured goods physically to facilitate availment of wrong and irregular Cenvat Credit under the guise of excisable goods manufactured in the factory premises of the said M/s. Saha Industries. Once it has been acknowledged that M/s. Saha Industries had manufactured goods, it could not at the same time be alleged that the said manufactured goods had not been supplied to the Appellant unless concrete and positive evidence was brought to this effect. (v) The only contrary finding of the Ld. Commissioner was that the goods received by the Appellant were not manufactured by M/s.Saha Industries. This would mean that the Ld. Commissionerhas not accepted the allegations leveled in the show cause notice that the goods were not received by the Appellant at all. According to him this portion of the order has been duly accepted by the department as the said portion of the order has not been reviewed by the department. Therefore the burden of proof that the Appellant did not receive the goods from M/s. Saha Industries but from other source was squarely on the department. According to him it i....
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....also submitted that even according to the Ld. Commissioner himself the raw material was not received by M/s. Saha Industries only in the month of December 2007 and Jan 2008. There is no finding by the Ld. Commissioner that even prior to the said date the raw material was not received by M/s.Saha Industries in order to manufacture the finished goods. (ix) That on the finding of the Ld Commissioner that M/s. Saha Industries had declared themselves to be the manufacturer of motors, electrical stampings etc and as per their self declaration they were not manufacturers of gears, rolls or conveyor systems, he submitted that a detailed statement of Shri Jayanta Kumar Saha was recorded wherein he was not confronted with the 48 invoices under which the Appellant had received the various types of capital goods. Even otherwise, he nowhere stated that they had not supplied any capital goods to the Appellant. (x) That on the evidentiary value of the certificate of the Chartered Engineer obtained by the Department in the month of August 2008 referring to the inspection of infrastructural facilities of M/s.Saha Industries, the Ld. Counsel submitted ....
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....alse in any manner. Similarly, there is also no allegation in the Show Cause Notice or finding in the impugned order that the financial as well as statutory records maintained by the Appellant were incorrect or false in any manner. In this regard, Ld. Counsel placed reliance upon the law laid down by the Hon'ble Supreme Court in the case of Gian Chand & Brothers Vs. Rattan Lal Singh reported at MANU/SC/0015/2013 wherein in para 28 of their judgment it has been held 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. (xiv) That reliance has been placed on the statements of six transporters and some vehicle owners. It was alleged in the show cause notice that some transporters who had transported the goods from M/s. Saha Industries were found to be non-existent, some denied having transported any goods from M/s. Saha Industries but some also stated that they had transported the plant and machinery from M/s. Saha Industries. But according to the Ld. Counsel in cases of alleged non-existent transporters, no panchnama has b....
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....department but could not be found subsequently it could not be said that the credit was availed on the basis of forged documents. It has been held that even if the original document was issued by the supplier of the inputs even by practicing fraud, a holder for valuable consideration unless shown to be a party to a fraud, could not be proceeded with by taking aid of larger period of limitation as indicated in Section 11A(1) of the Act. He therefore prayed for setting aside the impugned order and allowing the appeal. 7. The Ld. Authorized Representative referred to Revenue advanced the following submissions:- (i) The Ld. Authorized Representative referred to various paragraphs of the show cause notice which related to the activities of M/s.Saha Industries. (ii) He drew our attention to para 5 of the show cause notice wherein it was categorically alleged that M/s. Saha Industries had shown an estimated investment of Rs. 5 lacs in land, plant and machinery in their Registration Application and they had given the plan outlay of the factory premises as well, which had a shed measuring 25ft x 12 ft and marked "C" in the site ....
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....ioner in para 7.13 of his order has held that though the capital goods were received by the Appellant but the same were not manufactured by M/s. Saha Industries. But we find that the Ld. Commissioner has nowhere observed that the Appellant had actually received the said capital goods from other alternate source. Therefore, the whole case of the department that the transactions with M/s. Saha Industries were fake transactions and the Appellant took credit without receipt of the capital goods or non receipt of the goods clearly falls down. Even in the show cause notice it was alleged that the Appellant had utterly failed to verify the antecedents of the supplier-manufacturer for the purpose of availing of Cenvat credit. This would also mean that the goods were actually received by the Appellant without verifying the antecedents of the supplier manufacturer. It is well settled law that onus of proof that the Appellant received the capital goods from some other source was squarely on the department which it failed to prove On the contrary in the show cause notice sweeping allegations were made that the Appellant had taken Cenvat credit without receipt of t....
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....08 whereas the Appellant had received capital goods from M/s.Saha Industries in the months of March 2007, May 2007, September 2007 & October 2007. Further we hold that no reliance can be placed on the inquiries directed against some of the transporters the details of which have been given in the preceding paragraphs. We agree with the Ld. Counsel that though there is reference to these inquiries in para 6 to 9.2.6 of the show cause notice but the inquiry reports or the statements of the transporters have not been made part of the relied upon documents. Therefore, no cognizance can be given to the said allegation. Further we hold that the Ld. Commissioner could not have relied upon the said enquiries or statements of the transporters unless the same were made part of the relied upon documents. 9.2 That the Ld. Commissioner has tried to justify denial of Cenvat credit to the Appellant by rendering findings in para 7.22 of his Order that M/s. Saha Industries was not an assessee of Central Excise & manufacturer of excisable goods and had no power to issue central excise invoice on which Cenvat credit could be availed. We find these findings ....
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....Appellant. Therefore, this finding of the Ld. Commissioner cannot be sustained. 9.4 The Ld. Authorized Representative has relied upon two judgments of this Tribunal rendered in the case of Ujwal Ispat Pvt Ltd Vs. Commissioner of Cus & C.Ex, Nagpur reported in 2007 (218) ELT 221 (Tri.-Mumbai) and CCE, Ludhiana Vs. C.L. Engg. Ltd reported in 2012 (279) ELT 262 (Tri.-Del). In both the judgments there was ample evidence against the parties therein. In the case of Ujwal Ispat Pvt Ltd. who was manufacturer of finished goods had claimed that they had undertaken trading of goods but the transporters had denied transporting the goods as also some of the supplies were found to be bogus and others denied having supplied any such goods to the party therein. In the case of C.L. Engg. Ltd the Tribunal had rendered categorical finding that inputs on which Cenvat credit was availed by the party were never transported to their factory on the basis of preponderance of probability. In the present case the officers from Hdqrs. Anti-Evasion Unit, Central Excise, Kolkata-V Commissionerate had duly visited the unit of the Appellant on 02-04-2008. T....
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....518 (Tri.-Bang), wherein the appeal of assessee in respect of goods supplied by the same supplier, has been allowed. 5. The Ld. A.R. for the Revenue reiterated the findings of the Ld. Commissioner. 6. We find 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 have 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 (cited supra) has allowed the appeal 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 Ce....
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.... which he has taken Cenvat credit were goods on which appropriate duty of excise was paid. Once it is demonstrated that reasonable steps had been taken, which is a question of fact in each case, it would be contrary to the Rules to cast an impossible or impractical burden on the assessee. 10. For the aforesaid reasons, these appeals do not give rise to any substantial question of law. They are, accordingly, dismissed." We find the ratio of the abovementioned judgment of the Hon'ble High Court is squarely applicable to the facts of the present case. 7. By respectfully following the aforesaid judgments of the Hon'ble High court of Allahabad, we set aside the impugned order and allow the appeal filed by the appellant." 9.6 Similarly in the Appellant's own case being order No.75111/2020 dated 25-10-2019 in para 2 and 3 this Tribunal has held as under:- "2 The appellant, M/s. Jai Balaji Industries Limited, Unit-IV are engaged in the manufacture of Ferro Manganese falling under chapter heading 7202 of the Central Excise Tariff Act, 1985. The department has disputed the cenvat availament by the unit for the period May 2003 to ....
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....ck whether in fact he had paid duty on the goods supplied by him. The only reasonable step which he can take is to ensure that the supplier is trustworthy, the inputs are in fact received and that the documents, prima facie, appear to be genuine. The fact that the assessee made payment by cheque was held to be a proof of his bona fides. In the present case the above findings rendered by the Hon'ble Allahabad High Court are applicable on all fours to the facts of the present case. 9.8 We also take note of the final order No. 75631-75633/2020 dated 19-11-2020 which was passed in the case of Appellant's sister concern M/s. Jai Balaji Industries Ltd Unit-IV. In this case the credit was denied on Lime Coke which was purchased by the Appellant therein through one M/s. Dankuni Steel Ltd. On inquiry the said supplier, M/s. Dankuni Steel Ltd was found to be non-existent. The main reason for denying the credit to the party was that two letters were received by the department one from the Municipal Commissioner and the other from the Postal authorities according to which the said party was not in existence at the said place. This Tribunal after ana....