Custom, Excise & Service Tax Tribunal
M/S. Kisco Castings India Ltd vs C.C.E. & S.T.-Chandigarh on 27 April, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. II Appeal No. E/52362/2014-EX(SM) [Arising out of Order-in-Original No. CHD-EXCUS-000-APP-52-13-14 dated 07.03.2014 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Delhi]. For approval and signature: Honble Shri 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. Kisco Castings India Ltd. .Appellants Vs. C.C.E. & S.T.-Chandigarh .Respondent
Appearance:
Shri Kamaljeet Singh, Advocate for the Appellants Shri R.K. Mishra, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing: 27.04.2015 FINAL ORDER NO. 51584/2015-EX(SM) Per Ashok Jindal:
Appellant is in appeal against the impugned order wherein duty demand along with interest has been confirmed and equivalent penalty has been imposed on the allegation that appellant has taken Cenvat Credit on paper transactions and has not physically received the goods.
2. The facts of the case are that the investigation was conducted on one M/s. Jai Kara Steel Rolling Mills, Mandi, Govindgarh on 28.02.2005 and the gate keeper of the said factory submitted that the factory is closed from last one year and factory started working about 4-5 months back and 9-10 workers are working in the factory, only 2-4 machines are in working conditions and there is no stock of finished goods as well as raw material and he has never seen any direct loading and unloading of material in the factory. As M/s. Jai Kara Steel Rolling Mills was dealing through registered dealers namely M/s. Jyoti Steels, the premies of M/s. Jyoti Steels was visited which was found locked. Thereafter, conducting more investigation a show cause notice was issued to the appellant on the basis that invoices issued by M/s. Jyoti Steels are only paper transactions and no goods have been received by the appellant. Therefore, show cause notice was issued to the appellant as well as M/s. Jyoti Steels which was adjudicated and availment of Cenvat Credit on the invoices issued by M/s. Jyoti Steels was denied. Consequently, duty is demanded along with interest and penalty is also imposed on the appellant. Therefore, appellant is before me.
3. Shri Kamaljeet Singh ld. Advocate for the appellant appeared before me and submits that appellant is a manufacturer buyer of the impugned goods and they have received goods from M/s. Jyoti Steels against six invoices wherein the manufacturer is not M/s. Jai Kara Steel Rolling Mills. Therefore, on the basis of investigation conducted at the end of M/s. Jai Kara Steel Rolling Mills and concluding that as dealer is not existent demand is not sustainable. As they have received the goods in their factory under the cover of duty paid invoices which shows the manufacturer and supplier of the goods and they have paid the amount against this invoices through cheque, therefore, without conducting investigation at the end of transporter and manufacturer supplier or physical verification of the stock. The demand is not sustainable. To support this contentions he relied on the decision of Telson Mill final order no. 976/2012 SMV dated 17.07.2012 which has been confirmed by the Honble P&H High Court reported in 2015 (315) ELT 415 P&H. Shri Juhi Alloys Vs. C.C.E. 2013 (296) ELT 533 (Tri-Del) upheld by Honble High Court of Allahabad vide order No. 21/2014 dated 15.01.2014. Gyan and Gyan Casting ltd. final order no. A-5107/2014 dated 15.01.2014.
4. On the other hand Ld. AR oppose the contention of the Ld. Counsel and submits that in this case the first stage dealer who issued the invoice is non existent. Therefore, question of receipt of goods by the appellant does not arise. He further submits that enquiries were revealed which shows that first stage dealer was not having any godown to store the goods. Moreover he remained non co-operative with the departmental officer during the course of the investigation itself. Therefore, burden casts on the appellant to prove that they have received goods physically in their factory which they failed to do so without any tangible evidence. He also relied on the statement of M/s. Jyoti Steels, an authorized representative of the appellant. To support his contention he relied on the decision in the case of Neelkanth Steel Agro Industries Final order no. A/54432/2014-SM(BR) dated 29.10.2014 and Sidh Industries Vs. C.C.E. Chandigarh- 2010 (257) ELT 454 (Tri-Del).
5. Heard the parties. Considered the submissions and perused the record.
6. In this case the investigation started at the end of M/s. Jai Kara Steel Rolling Mills where they came out with the information that they are selling goods through M/s. Jyoti Steels. Thereafter, investigation was conducted at the premises of M/s. Jyoti Steels which was found non existent and having no godown. In these set of facts, it is concluded against the appellant on the basis of the statement of proprietor of M/s. Jyoti Steels and authorized representative of appellant that appellant has procured invoice not physically any goods. Therefore, Cenvat Credit was denied. In this case, I find that the manufacturer supplier of the goods is not M/s. Jai Kara Steel Rolling mills at all. No investigation has been conducted by the Revenue at the end of manufacturer supplier against whose invoices the appellant has taken Cenvat Credit. No Investigation was conducted from the transporters to ascertain the fact whether goods have been transported to the appellants factory or not. Merely on the ground that M/s. Jyoti Steels is non existent and having no godown, denial of Cenvat Credit proposed to be denied. It is not disputed by the Revenue that during the relevant period M/s. Jyoti Steels was the registered dealer and registration was granted to M/s. Jyoti Steels by Central Excise Registration Department. If a supplier is being the registered dealer of the department itself. The department cannot allege that dealer is non existent unless and until registration is cancelled.
7. As per Rule 9 (3) of the Cenvat Credit Rules 2002 which deals with the availment of Cenvat Credit by the assessee and same is reproduced here as under:
(3) The manufacturer or producer of excisable goods or provider of output service taking CENVAT credit on input or capital goods or input service, or the input service distributor distributing CENVAT credit on input service shall take all reasonable steps to ensure that the input or capital goods or input service in respect of which he has taken the CENVAT credit are goods or services on which the appropriate duty of excise or service tax as indicated in the documents accompanying the goods or relating to input service, has been paid.
Explanation.- The manufacturer or producer of excisable goods or provider of output service taking CENVAT credit on input or capital goods or input service or the input service distributor distributing CENVAT credit on input service on the basis of, invoice, bill or, as the case may be, challan received by him for distribution of input service credit shall be deemed to have taken reasonable steps if he satisfies himself about the identity and address of the manufacturer or supplier or provider of input service, as the case may be, issuing the documents specified in sub-rule (1), evidencing the payment of excise duty or the additional duty of customs or service tax, as the case may be, either-
(a) from his personal knowledge; or
(b) on the basis of a certificate given by a person with whose handwriting or signature he is familiar; or
(c) on the basis of a certificate issued to the manufacturer or the supplier or, as the case may be, the provider of input service by the Superintendent of Central Excise within whose jurisdiction such manufacturer has his factory or such supplier or provider of output service has his place of business or where the provider of input service has paid the service tax, and where the identity and address of the manufacturer or the supplier or the provider of input service is satisfied on the basis of a certificate, the manufacturer or producer or provider of output service taking the CENVAT credit or input service distributor distributing CENVAT credit shall retain such certificate for production before the Central Excise Officer on demand.
8. As per the said rule, the assessee is required to find out while taking Cenvat Credit to ensure that the input on which Cenvat Credit is taken, the relevant document is accompanied by them or not. Admittedly, in this case the appellant is able to produce the invoice against which appellant has availed Cenvat Credit and same has been entered in their RG-23 Register. Therefore, the burden cast on the revenue to prove that this is only a paper transaction and goods have not been received by the appellant at all. To ascertain this fact that appellant has not received the goods, the statement of transporter is very much relevant to find out the truth. Moreover, investigation at the end of manufacturer supplier also reveal the truth whether the manufacture supplier has supplied the goods to the appellant through the registered dealer or not. In this case Ld. AR relied on two case laws. First in the case of Sidh Industries (Supra), the said case law is not relevant to the facts of that case as in that case the issue was of penalty on the registered dealer. In fact in this case appellant is not the registered dealer. He is the manufacturer / buyer of the goods. Therefore, the said case is of no help to the revenue. Further, in the case of Neelkanth Steel and Agro Industries (Supra) the observation of this Tribunal is that manufacturer has not produced any evidence. But in this case the appellant has produced invoice on the strength of which they have availed Cenvat Credit and the goods have been entered in their RG-23 register and same has been supported by the weightment slips which were produced by the appellant before the authorities below. When these material evidence are on record then the burden of not receiving the goods by the appellant shifts on the revenue which revenue failed to do so.
9. In these circumstances, the charge against the appellant that they have not received goods and it was only the paper transaction is not sustainable.
10. Consequently impugned order is set aside, appeal is allowed with consequential relief if any.
(Dictated and pronounced in the open court.)
(Ashok Jindal) Member (Judicial)
Bhanu
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E/52362/2014-EX(SM)