Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri Manoj Kutty (Ar) on 7 March, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad COURT Appeal No. : E/143/2011 SM Arising out of : No. RKA/ 563-566/ SRT-I/ 2010 dated 27.10.2010, Passed by : The Commissioner, CE&ST, Surat I For approval and signature : Mr. H.K. Thakur, Hon.ble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : CCE & ST., Surat I Represented by : Shri Manoj Kutty (AR) Respondent (s) : M/s Paramount Copper Rolling Mills P Ltd
Represented by : Shri Willington (Adv.) CORAM :
Mr. H.K. Thakur, Hon.ble Member (Technical) Date of Hearing / Decision : 7/3/2014 ORDER No. A/10564/2014 dtd 7/3/2014 Per : Mr. H K Thakur;
The present appeal is filed by the Revenue against Order in Appeal No. RKA/ 563-566/ SRT-I/ 2010 dated 27.10.2010, passed by the Commissioner (Appeals), Central Excise & Customs, Surat-I.
2. Brief facts of the case are that the respondent is a manufacturer of copper flats, copper rods, copper bus bars etc. and are availing CENVAT Credit of duty paid on inputs purchased from various persons including M/s Pranav Metal Mart, Nadiad, a registered dealer (hereinafter referred to as Pranav for the sake of brevity). The officers of the Director General of Central Excise Intelligence (DGCEI) collected intelligence to the effect that the respondent had been using non-duty-paid scrap for the manufacture of its final products but in order to avail CENVAT Credit. Respondent obtains only duty paying invoices of various inputs without actual receipt of inputs mentioned therein. Revenue had general intelligence that the practice of availing CENVAT Credit fraudulently in this manner was in vogue at the relevant time in respect inputs shown to be transported from Jammu & Kashmir to units in Gujarat via Delhi. Accordingly, DGCEI prepared details of Lorry Receipt No. (LR) of one Signal Road Carriers of Delhi showing transportation of copper from Delhi to units in Gujarat via Rattanpur Check Post of Commercial Tax Department of Rajasthan and Shamlaji Check Post of the Transport Commissioner of Gujarat for the period of investigation. The general investigation revealed, that in many cases, the vehicles shown mentioned in the LRs did not cross the check posts leading to a reasonable conclusion by the Revenue that the LRs travelled goods under those from Delhi to Gujarat without goods mentioned therein. Investigations revealed that in remaining cases, the vehicles mentioned in LRs did pass through the check posts along with loaded goods. Further investigations revealed from the Delivery Registers of Ahmedabad Office of Singal Road Carriers that where the vehicles actually entered Gujarat by crossing the said check posts, in many cases goods transported from Delhi to units in Gujarat were other than copper as per details in Annexures to the show cause notice. Based on the these investigations conducted by the officers of the DGCEI, was alleged that the respondent had fraudulently availed CENVAT Credit of Rs. 4,66,199/- without actual receipt of inputs mentioned in the invoice, inasmuch as Pranavn (registered dealer) had not received copper ingots from M/s Viraj Industries, Jammu as described above. The original adjudicating authority confirmed the demand of alleged wrongly availed CENVAT Credit of Rs. 4,66,199/- along with interest, imposed equivalent penalty under Rule 13(2) of CENVAT Credit Rules, 2004, and also imposed penalty of Rs. 5,000/- under Rule 25 of the Central Excise Rules, 2002 on the respondent. On appeal, the Commissioner (Appeals) set aside the Order in Original.
3. Shri Manoj Kutty, Ld. A.R. appearing on behalf of the Revenue argued as under:
(i) That the CENVAT Credit was not admissible to the respondent on the strength of the invoice issued by Pranav, which contained wrong declaration to the effect that the duty-paid goods have been initially received/ purchased from M/s Viraj Industries, Jammu, in as much as mere invoices and LRs was received by Pranav.
(ii) That Commissioner (Appeals) has erroneously held that CENVAT credit was admissible to the respondent even if the investigations revealed that Pranav had not received any goods from the principal suppliers of Jammu/ Delhi.
(iii) That the ratio of the case law cited as - Monarch Metals (P) Ltd. Vs. CCE, Bhavnagar [2009 (95) RLT 334 (CESTAT-Ahmd.)], applied by the Commissioner (Appeals), was not applicable to the facts and circumstances of the present case in as much as the present case is issuance of fake LRs and not that of non-stamping of LRs.
(iv) That CENVAT Credit was not available to the respondent when the CENVATABLE invoice was based on fake LR showing transportation of goods on paper only, as the very basis of issuing invoice is vitiated. In this respect the Ld. AR cited the case law ICI India Ltd. Vs. Commissioner of Customs (Port), Kolkata [2009 (240) ELT 290 (Tri. Kolkata)].
4. Shri Willingdon C., Ld. Advocate appearing on behalf of for the respondent argued as follows:
(i) that the Authorization, issued by the Committee of Commissioners under Section 35-B of the Central Excise Act, 1944, was not proper as there was no indication whether any committee was constituted and conducted a common sitting and deliberations for ascertaining that the impugned order was legal and proper. He argued that the appeal was not maintainable on this ground alone. He cited the following case laws in this regard:
(a) CCE Vs. Khushi Aromatics [2009 (94) RLT 450 (CESTAT);
(b) CCE Vs. Mahanadi Coalfields Ltd. [2009 (13) STR 409 (Tri.)];
(c) UOI Vs. Kothari Products Ltd. [2012 (278) ELT 43 (Gau.)];
(d) CCE Vs. Kundalia Industries [2012 (279) ELT 351 (Del.);
(e) CCE Vs, Office Tech. Industries [2009 (246) ELT 411 (Tri.)];
(f) CCE Vs. U.P. State Sugar Corporation [2009 (246) ELT 253 (Tri.)];
(g) CCE Vs. Alpha Control Instruments (P) Ltd. 2009 (93) RLT 637 (CESTAT); and
(h) CCE Vs. Pioneer Fabricators (P) Ltd. [2011 (24) STR 125 (Tri.).
(i) On merits, he argued that the present consignment of duty-paid inputs weighing 7851 Kgs. of copper ingots, transported by Truck No. RJ 14 GA 1991, involving CENVAT Credit of Rs. 4,66,199/-, had actually reached the premises of the registered dealer (Pranav) as well as the factory of the respondent, as the investigations in respect of goods loaded on Truck No. RJ 14 GA 1991 under the cover of LR No. 2987 dated 21.08.2006 had revealed that the said truck actually crossed the said check posts on 23.08.2006 as per details in Annexure-A and Annexure-B (S. No. 111) to the show cause notice. As regards the Revenues allegation that the goods transported in the said truck were other than copper, he argued that the allegation was baseless inasmuch as the Truck No. RJ 14 GA 1991 and LR No. 2987 dated 21.08.2006 do not appear anywhere in Annexure-C to the show cause notice which, according to investigations, contained details of vehicles which actually crossed the said check posts under the cover of various LRs of Singal Road Carriers, but allegedly carried goods other than copper. He, therefore, argued that the demand of Rs. 4,66,199/- could not be confirmed against the respondent.
5. On the preliminary objection raised by the Ld. Advocate for the respondent, Ld. A.R. Shri Manoj Kutty, argued that the Authorization issued by the Committee of Commissioners was proper. He argued that even if some defects are found in Authorization, the appeal cannot be dismissed on this ground alone as held by various decisions of the Honble High Courts and the Tribunal. He cited the following case laws in this context:
(i) CCE, Kanpur Vs. Ufan Chemicals [2013 (290) ELT 217 (All.)];
(ii) Commissioner Vs. S. Krishna & Co. [2013 (293) ELT A125 (All.)];
(iii) Commissioner of Central Excise, Ranchi Vs.La Opala, RG Ltd. [2012 (285) ELT 501 (Jhar.)];
(iv) Gujarat High Court Order dated 20.10.2011 in Tax Appeal No. 2620/10 in the case of CCE Surat-I Vs. Rupa Dyeing & Printing Pvt. Ltd.; and
(v) Gujarat High Court Order dated 29.11.2013 in Tax Appeal No. 2620/10 in the case of Rupa Dyeing and Printing Pvt. Ltd. Vs. Commissioner of Central Excise, Surat-I.
6. Heard both side and perused the case records. As regards the defects in Authorization, as pointed out by the Learned Advocate, it is now well settled, as held by various High court Judgments relied upon by the Revenue, that tribunal should not dismiss/ reject Revenues appeals only on technical grounds as pointed by the advocate. In view of the above decisions, the preliminary objections raised by the advocate for the respondent are not sustainable.
7. On merits of the case, I find that the CENVAT Credit of Rs. 4,66,199/- is sought to be denied to the respondent on the ground that invoice No. 29 dated 24.08.2006 of the registered dealer (Pranav) did not accompany the copper ingots procured by Pranav from M/s Viraj Industries, Jammu. I find from Annexure-A to the show cause notice that the copper ingots weighing 7851 Kg. were purchased by Pranav from M/s Viraj Industries, Jammu under invoice No. 233 even as per the investigation. dated 18.08.2006. There is no dispute about transportation of copper ingots from Jammu to Delhi under the said invoice No. 233. It is the contention of the Revenue that the copper ingots, purported to have been transported from Delhi to Gujarat on Truck No. RJ 14 GA 1991, under the cover of Lorry Receipt No. 2987 dated 21.08.2006, have not actually been received by Pranav, hence CENVAT Credit was inadmissible. At the same time, as per the investigation itself the said truck did enter Gujarat State on 23.08.2006 but carried goods other than copper ingots. As per show cause notice, where investigations has revealed that Trucks moving en route under the cover of LRs of Singal Road Carriers actually crossed the check posts within reasonable period of seven days. Further investigations were conducted from the records of Ahmedabad office of Singal Road Carriers, which revealed that in the case of Trucks, whose details are recorded in Annexure C to the show cause notice, actually carried goods other than copper. I find that neither Truck No. RJ 14 GA 1991 nor the LR No. 2987 appears in the said Annexure-C leading to the conclusion that the said truck carried copper ingots and reached the premises of the registered dealer (Pranav). I find that the Revenue has thus failed to prove that the copper ingots in question were not received by Pranav from M/s Viraj Industries, Jammu. Accordingly, I find that the respondent had correctly availed CENVAT Credit of Rs. 4,66,199/- on the basis of Pranav invoice No. 29 dated 24.08.2006.
8. In view of the above credit of inputs was correctly availed by the respondent as reflected in their statutory records. Accordingly, appeal filed by the Revenue is rejected.
(Operative portion pronounced in the Court) (H.K. Thakur) Member (Technical) swami 2