Custom, Excise & Service Tax Tribunal
M/S. Indo Asian Fusegear Ltd vs Commissioner Of Central Excise on 8 May, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 2949 & 2674 of 2011-EX [SM]
[Arising out of Order-In-Appeal No. 184-185/CE/APPL/NOIDA /2011 dated 23.08.2011 passed by Commissioner of Central Excise (Appeals), NOIDA]
For approval and signature:
Honble Ms. Archana Wadhwa, 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?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
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
M/s. Indo Asian Fusegear Ltd. Appellants
Shri Suresh Garg
Vs.
Commissioner of Central Excise Respondent
NOIDA Appearance:
Shri Sekhar Vyas , Advocate for the Appellants Shri M S Negi, DR for the Respondent Date of Hearing: 13.03.2014 Date of Hearing: 08.05.2014 ORDER NO. FO/ 52026-52027 /2014- (SM) Per Archana Wadhwa:
Both the appeals are being disposed of by a common order as they arise out of same impugned order passed by the authorities below.
2. As per facts on record M/s. Indo Asian Fusegear Ltd. are engaged in the manufacture of miniature circuit breakers falling under Chapter 85 of the Central Excise Tariff Act, 1985. They had availed Cenvat credit on duty paid in respect of various machines received by them under the cover of invoices issued by three manufacturers M/s. Hindustan Electronics, Ghaziabad, M/s. Kumar Abhishek Engineering Co. P Ltd., Ghaziabad and M/s. Krishna Machines and Tools, Ghaziabad.
3. It is seen that investigation were conducted by the department at the end of the said manufacturer and the statements of their representative were recorded. The Revenue found out that said three suppliers of the machines were not actually manufacturing the goods and no Central Excise duty strand paid by them. Accordingly, the appellants were not entitled to the credit of duty reflected in the invoices under the cover of which the said machines were received by them.
4. In view of the above backdrop, proceedings were initiated against the appellant by way of issuance of show cause notice on 11.12.07 proposing denial of credit as also for imposition of penalty and confiscation of various capital goods installed in their factory. The notice culminated into an order passed by the original adjudicating authority. On appeal against the same, the Commissioner (Appeals) remanded the matter by observing that Revenues entire case is based upon two statements of authorised representatives of the suppliers, who have not been offered for cross examination. Accordingly, he remanded the matter to the Assistant Commissioner for fresh adjudication, with directions to offer the deponent of the statement for cross examination.
5. During denovo adjudication, the original adjudicating authority offered only one deponent for cross examination and did not allow the cross examination of second person by observing that they have not spoken anything against the appellant. The demands were again confirmed along with imposition of penalty and confiscation of goods. Said order of the lower authorities was upheld by Commissioner (Appeals). Hence the present appeal.
6. The appellants contention is that they have received the goods under the cover of proper invoices issued by the suppliers showing Central Excise registration No. as also payment of duty. Further, UP Trade Tax and CST has been paid on the supplies of the said goods. They also relied on material receipt notes showing that said capital goods have actually been received by them and used by them. As such, if the supplier has not paid any duty and has wrongly shown the duty payment particulars in the invoices, the Revenues remedy lies at their end.
7. Learned DR appearing for the Revenue has reiterated all the reasoning of the authorities below by submitting that inasmuch as the department has clearly produced evidence that the said supplier of the goods have not actually manufactured the same and have not paid any Central Excise duty, the credit stand rightly disallowed by the authorities below.
8. After appreciating the submissions made by both the sides, and after going through the impugned orders, I find that the Revenues entire case is based upon the statements of two deponents of suppliers. The matter was earlier remanded by the Commissioner (Appeals) with directions to offer both the deponents for cross examination. Said directions of the Commissioner (Appeals) do not stand carried out by the Asstt. Commissioner.
9. In any case, and in any view of the matter, I find that apart from the said statement, there is no other evidence on record. Admittedly the appellants have received the capital goods under the cover of invoices issued by the suppliers. The same stand installed in their unit and infact also stand confiscated by the authorities below. The appellants have produced on record the evidence of payment of U P Trade tax as also CST. Further, they have produced material received notes showing that the said material were received by them.
10. I find that an identical dispute involving one of the present supplier i.e. M/s. Hindustan Electronics was the subject matter of Tribunals decision in the case of Tarsen Polyfab Pvt. Ltd. vs. CCE, NOIDA [2011 (264) ELT 225 (Tri-Del)]. It was observed as under:-
4. Heard both? sides. I have carefully examined the submissions made by both sides and the statement of the appellants during the course of investigation and the show cause notice also. There is no allegation against the appellants that the capital goods in question which were procured against the said invoices were not available in the factory of the appellants. Moreover, the department has not corroborated with any evidence from where these capital goods were procured, if they are not procured against the impugned invoices. The only allegation in this case that the supplier has done some ghapla of central excise duty. In that case, if at all any demand is to be made that is to be against the supplier M/s. Hindustan Electronics. The appellants have taken due care while procuring capital goods. Hence, in the facts and circumstances of this case, the duty demand and penalties are not sustainable.
Applying the ratio of the decisions of the Tribunal to the facts of the present case, which are identical, I find that there is no evidence on record that the appellant was a party to the non-payment of Central Excise duty by the suppliers. They have followed the procedure correctly and have availed the credit on the basis of invoices issued by the suppliers. The said invoices contain all the particulars required to be mentioned in the invoices and are proper cenvatable invoices. I agree with the learned advocate that if the Central Excise duty does not stand paid by the supplier, the Revenues action should have been directed against the said supplier for the recovery of Central Excise duty. The appellant cannot be directed to reverse the credit especially when there is no dispute about the receipt of capital goods under the cover of Central Excise invoice.
11. Apart from the above, I also find that credit was availed during June, 2004 to October, 2004 whereas the show cause notice stand issued on 12.11.07. Having already held that appellants availed the credit in accordance with the provisions of Cenvat Credit law and not being a party to the fraud if any, committed by the supplier, cannot be attributed with any malafide. In that case, the extended period of 5 years cannot be invoked. Accordingly, I hold the demand to be time barred also.
12. In view of the above, the impugned orders are set aside and both the appeals are allowed with consequential relief to the appellants.
(Pronounced in the open Court on )
( Archana Wadhwa ) Member(Judicial)
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