Custom, Excise & Service Tax Tribunal
Om Steel Rolling Mills vs Ludhiana on 3 August, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH - 160 017
SINGLE MEMBER BENCH
COURT NO. I
APPEAL NO. E/60472/2018
[Arising out of Order-in-Appeal No. LUD-EXCUS-001-APP dated
19.01.2018 passed by the Commissioner of Central Excise (Appeals),
Ludhiana]
Date of hearing/decision: 03.08.2018
For approval and signature:
Hon'ble Mr. Ashok Jindal, Member (Judicial)
M/s Om Steel Rolling Mills : Appellant(s)
VS
C.C.E. & S.T. - Ludhiana : Respondent(s)
Appearance:
Present for the Appellant(s): None (On merit) Present for the Respondent(s): Shri Vijay Gupta (AR) CORAM:
Hon'ble Mr. Ashok Jindal, Member (Judicial) FINAL ORDER NO. 62605 /2018 Per : Ashok Jindal The appellant filed this appeal against the impugned order wherein Cenvat credit on inputs has been denied to the appellant on the premise that the dealer M/s. S.K. Garg & Sons who has supplied the goods to the appellant is non-existence and he has merely issued invoice not the goods.
2. The facts of the case are that appellant procured goods from second stage dealer M/s B.R. Ispat Inds., Mandi Gobindgarh, who procured the goods from one M/s S.K. Garg. An investigation was 2 APPEAL NO. E/60472/2018 conducted at the premises of M/s. S.K. Garg & Sons on 14-8-2007, it was found that the premises were locked and godown is also non- existence. Enquiries were made with the landlord who stated that M/s. S.K. Garg & Sons has vacated the premises in 2003 itself and thereafter he never let out the premises to anybody. On the basis of investigation and on the basis of statement of M/s. S.K. Garg & Sons the registration of M/s. S.K. Garg & Sons was cancelled on 21-7-2008 retrospectively. Further investigation revealed that the appellant before me have procured goods from M/s. S.K. Garg & Sons and availed Cenvat credit on the goods purchased from M/s. S.K. Garg & Sons. As M/s. S.K. Garg & Sons found non-existence, therefore it was alleged against the appellant that they have received the invoices but not the goods. In these set of facts a show cause notice was issued to the appellant to deny Cenvat credit on inputs procured on the strength of the invoices issued by M/s. S.K. Garg & Sons. Consequently, duty was proposed to be demanded along with interest and penalty was sought to be imposed. The matter was adjudicated, Cenvat credit was denied, consequently duty was demanded along with interest and equal amount of penalty. Aggrieved from the said order, the appellant is before me.
3. Ld. Counsel appearing on behalf of the appellant submits that there is no inculpatory statement of the appellant. In fact, the appellant have stated that they have physically received the goods on invoices and said goods have been used in manufacture of the final goods. Therefore, Cenvat credit cannot be denied. It is also submitted that no investigation was conducted with the transporter of the goods whether they have transported the goods to the appellant and no 3 APPEAL NO. E/60472/2018 investigation was conducted at the end of the manufacturer/suppliers of the goods. In that circumstance, Cenvat credit cannot be denied. It is also submitted that M/s. S.K. Garg & Sons filed ER-1 returns with the department and the same have been accepted by them in these circumstances also Cenvat credit cannot be denied. In support of his contention ld. Counsel also relied on the decision of CCE, Ludhiana v. Dhawan Steel Industries - 2015 (324) E.L.T. 169 (Tri.-Del.).
4. On the other hand, ld. DR opposes the contention of the ld. Counsel and submits that in this case the Preventive Officers of the Central Excise department visited the premises of M/s. S.K. Garg & Sons on 13-8-2007 and it was found that M/s. S.K. Garg & Sons is non-existence. The investigation was started and later on it was revealed that as M/s. S.K. Garg & Sons is engaged in issuing of the fake cenvatable invoices for availment of the Cenvat credit by the appellant, in fact, no godown was in existence where the goods to be stored. He further submits that the ld. Commissioner (Appeals) has examined the issue and allows the credit where the manufacturer/supplier has issued the invoice and on the same day goods have been received by the appellant where there is a gap of seven days or more the Cenvat credit was denied. As there was no storage capacity with Mr. S.K Garg & Sons therefore, in that circumstance, Cenvat credit is rightly disallowed.
5. Heard the parties and considered the submissions.
6. I find that in the matter in hand no investigation conducted at the end of manufacturer/supplier or the transporter to reveal the truth whether manufacturer/supplier has supplied the goods in question to 4 APPEAL NO. E/60472/2018 M/s. S.K. Garg & Sons or the transporter has transported the goods to the premises of the appellants which is vital evidence to reveal the truth. Further, M/s. S.K. Garg & Sons was registered dealer during the impugned period and all the ER-1 returns were filed by M/s. S.K. Garg & Sons which were accepted by the department. Therefore, in the absence of any corroborative evidence to show that the appellant have not received the goods, it cannot be alleged against the appellant that they have received the invoices and not the goods merely on the ground that there was no storage facility specifically when the landlord made a statement that the godown was let out to the dealer. In the case of M/s. Dhawan Steel Industries (supra), this Tribunal has examined the issue wherein M/s. S.K. Garg & Sons was the dealer who supplied the goods to M/s. Dhawan Steel Industries and case has been booked against M/s. Dhawan Steel Industries that they have not received the goods from M/s. S.K. Garg & Sons. In that circumstances, Cenvat credit was sought to be denied to M/s. Dhawan Steel Industries but this Tribunal after examining the issue held as under :-
"4. After considering the submissions made by learned AR and on perusal of the record, I find that the invoices issued by M/s. S.K. Garg and Sons giving details of manufactures as well as manufacturer/supplier of the goods. No investigation was conducted at the end of manufacturer / supplier as well as transporter of the goods to reveal the truth. The case has been made against the respondent on the presumption that supplier-dealer is not existing firm therefore, there was only paper transaction. Cases cannot be booked merely on the presumption and assumption; there should be corroborative evidence to prove the allegations. In this case, allegation has not been supported with tangible evidence. Therefore, learned Commissioner (Appeals) has rightly set aside the proceedings against the respondents. In these circumstances, I do not find any infirmity in the impugned order and same is upheld. Appeal filed by the Revenue is dismissed."5 APPEAL NO. E/60472/2018
7. The same issue came up before this Tribunal in the case of Sadhashiv Casting Pvt. Ltd. vide Final Order No. 233/2016-CHD, dated 23-3-2016, wherein this Tribunal relying on the precedent decision of the Tribunal in the case of M/s. Dhawan Steel Industries (supra) and M/s. Jain Steel Tubes and other vide Order Nos. 96- 102/16 CHD, dated 11-2-2016 as discussed above, I hold that in the absence of any investigation at the end of manufacturer/supplier or the transporter, the Cenvat credit cannot be denied to the appellant.
8. In view of the above observations, the impugned order is set aside, appeal is allowed with consequential relief, if any.
(Order dictated and pronounced in the court) Ashok Jindal Member (Judicial) Kailash