Custom, Excise & Service Tax Tribunal
M/S.Rajan Engineering Works vs Cce, Delhi-Iv, Faridabad on 14 July, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER BENCH
Court-IV
Excise Appeal No.2311 of 2009-SM
Date of Hearing/Decision: 14.07.2011
(Arsing out of Order-in-Appeal No.33/CE/Appl/DLH-IV/2009 dated 6.4.09 passed by the CCE(A), Delhi-IV, Faridabad)
For approval and signature:
Honble Mr.Ashok Jindal, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s.Rajan Engineering Works Appellant
Vs.
CCE, Delhi-IV, Faridabad Respondent
Present for the Appellant: Shri K.K.Sharma, Advocate
Present for the Respondent: Ms.R.k.Jagdev, SDR
Coram: Honble Mr.Ashok Jindal, Member (Judicial)
ORDER NO._______________
PER: ASHOK JINDAL
The appellants are in appeal against the impugned order for demanding of duty alongwith interest and equivalent amount of penalty on the allegation that the appellants have wrongly taken the cevnat credit on the invoices without receiving inputs physically in the factory.
2. The brief facts of the case are that on gathering information, the factory premises of the appellants was visited and found that the appellants have taken cenvat credit input credit on the invoices raised by M/s.Kashish Products Impex Pvt.Ltd., Delhi. Shri Naresh Guleria of M/s.Kashish Products Impex Pvt.Ltd. in his statement has statement that they have not supplied the goods to the appellants and have issued only invoices. Therefore, it was alleged against the appellants that they have taken input credit on the invoices without receiving the goods for which they are not entitled. The show cause notice was issued to the appellants for demanding of duty for inadmissible credit alongwith interest and proposal of the imposition of penalty under Section 11AC of Central Excise Act, 1944. The show cause notice was adjudicated and demand of duty was confirmed alongwith interest and equivalent of amount of penalty under Section 11AC ibid. The adjudicating order was confirmed by the Commissioner (Appeals). Aggrieved by the said order, the appellant are in appeal before this Tribunal.
3. Learned Advocate appeared on behalf of the appellants and submitted that the appellants have taken credit on the strength of duty paid documents against which they have physically received the goods in their factory. He also submitted that during the course of investigation, there is no discrepancy in the stock was recorded by the investigating team. If they have not physically received the goods, there must be shortage of goods in the stock which have not been found short. He further submitted that not only the receipt of goods against duty paid invoices they have also made payment through bank cheque. The demand has been raised against the appellants only on the basis of statement of inputs supplier. Although inputs supplier was not made the party to the show cause notice. Therefore, the demand is not sustainable as the department has failed to prove the charge of non receipt of the goods against the duty paid invoices. To support his contention, he relied on the decision of the Tribunal in the case of CCE, Mumbai vs.Prakash Industrial Corporation reported in 2009 (248) ELT 536, in the case of Motherson Sumi Electric Wires vs. CCE, Noida reported in 2009 (246) ELT 651 and CCE, Chandigarh vs. Shakti Roll Cold Strips Pvt.Ltd. reported in 2008 (229) ELT 661 (P & H). He further submitted that the statement of the supplier is not relevant to the impugned period as held by this Tribunal in the case of Paramount Communication Ltd. vs. CCE, Jaipur vide Stay Order No.86/2011-Ex dated 17.1.2011. Therefore, demand is not sustainable and the impugned order is to be set aside.
4. On the other hand, SDR appeared on behalf of the Revenue and submitted that the appellants have taken the credit without physically receiving the goods. The statement of inputs supplier is very much reliable that when he has not manufactured the goods how he can supply the goods to the appellants. Therefore, the demand has rightly raised against the appellants for availing the credit on the duty paid invoices without receiving the goods is in contravention to the provisions of law.
5. Heard both sides and considered the submissions made by them.
6. On careful consideration of the submissions made by both sides, I find that in this case, the demand has been raised only on mere statement of the inputs supplier that he has not supplied the inputs and he has not manufactured the same in his statement dated 26.5.2006. In fact, the appellants have taken the credit on the invoices raised during the period October, 2003 to August, 2004. As observed by this Tribunal in the case of Paramount Communication Ltd. cited supra, that the raid was conducted on 14.2.2006 in the factory premises of the inputs supplier. The finding about absence of manufacturing activity in the factory is restricted only for the period of search of the factory and not to the period prior to the search. Therefore, the statement of inputs supplier is not for the period from October, 2003 to August, 2004. Further, in the case of Prakash industrial Corporation (supra), this Tribunal has observed that the department did not bother to investigate whether the actual vehicle numbers used in transportation of goods to the place of the assessee, therefore, no evidence has been brought on record. In the case of Motherson Sumi Electric Wires (supra), again this Tribunal has observed that there is no evidence in the form of statement of transporters to support the case of the Department regarding non-receipt of inputs by the appellants. In this case also, the department has failed to produce any statement of the transporter or the actual receipt the goods that the goods have been transported out of State. Therefore, in the absence of any corroborative evidence, the case cannot be made merely on the statement of the inputs supplier.
7. In view of the above observation, the impugned order is set aside and the appeal is allowed with consequential relief if any to the appellants.
(ASHOK JINDAL) MEMBER (JUDICIAL) mk 6 5