Custom, Excise & Service Tax Tribunal
Deepak Kumar Agarwal vs Bolpur Commissionerate on 7 January, 2026
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
REGIONAL BENCH - COURT NO.2
Excise Appeal No. 77010 of 2018
(Arising out of Order-in-Appeal No. 97/KAI/2018 dated 20/03/2018 passed by
Commissioner of Central Tax, Kolkata Audit-I, CGST & CX Commissionerate)
M/s. Super Shakti Metaliks Pvt. Ltd.
[Formerly M/s Super Smelters Ltd.
(Unit-I), Kanjilal Avenue, Durgapur-713210, West Bengal)
Appellant
VERSUS
Commissioner of CGST & Central Excise, Bolpur
(Nanoor Chandidas Road, Sian, Bolpur-731204, Birbhum, West Bengal)
Respondent
With Excise Appeal No. 77216 of 2018 (Arising out of Order-in-Appeal No. 97/KAI/2018 dated 20/03/2018 passed by Commissioner of Central Tax, Kolkata Audit-I, CGST & CX Commissionerate) M/s. Gagan Ferrotech Ltd.
(180, Jamuria Industrial Estate, Vill.+P.O.-Ikra, Jamuria 713336, Dist.-Burdwan, West Bengal) Appellant VERSUS Commissioner of CGST & Central Excise, Bolpur (Nanoor Chandidas Road, Sian, Bolpur-731204, Birbhum, West Bengal) Respondent And Excise Appeal No. 77313 of 2018 (Arising out of Order-in-Appeal No. 97/KAI/2018 dated 20/03/2018 passed by Commissioner of Central Tax, Kolkata Audit-I, CGST & CX Commissionerate) Shri Deepak Kumar Agarwal, Director M/s. Gagan Ferrotech Ltd.
(180, Jamuria Industrial Estate, Vill.+P.O.-Ikra, Jamuria 713336, Dist.-Burdwan, West Bengal) Appellant VERSUS 2 E/77010/2018. E/ 77216/2018, E/ 77313/2018 Commissioner of CGST & Central Excise, Bolpur (Nanoor Chandidas Road, Sian, Bolpur-731204, Birbhum, West Bengal) Respondent APPEARANCE :
Adjournment Request for Appellant No. 1, Shri N. K. Chowdhury, Advocate for Appellant Nos. 2-3 for the Appellant Shri P. Das, Authorized Representative for the Respondent CORAM:
HON'BLE MR. RAJEEV TANDON, MEMBER (TECHNICAL) FINAL ORDER NO.75008-75010/2026 Date of Hearing : 09 December 2025 Date of Pronouncement : 07/01/2026 PER RAJEEV TANDON The three appeals arise out of a common Order-in-Appeal and are therefore taken up for consideration even in the absence of any representation on part of Super Shakti Metaliks Pvt. Ltd. who have sought an adjournment in the matter citing non-availability of their Advocate. The said request is declined as the appeal has been listed at least on two occasions during the year 2025 and at least on six occasions prior to that.
2. The facts of the case are that the appellant No. 2, M/s. Gagan Ferrotech Ltd. amongst others were issued a Show Cause Notice dated 13th October 2015 for denial of Cenvat Credit on certain quantities of raw material goods, primarily on the assumption that the appellant had not received the said goods on which the Cenvat Credit was so availed. The appellant no. 2 is a manufacturer of excisable goods falling under Chapter 72 and procures duty paid inputs and avails Cenvat Credit thereon. This credit is utilized towards payment of duty at the time of clearance of the finished goods. During the period 22nd November 2010 to 8th March 2011, it is alleged by the department that the appellants had procured Billets/Sponge Iron from two manufacturers (M/s. Ankit Metal & Power Ltd. & M/s. Super Smelters Ltd.) and one dealer (M/s.
3E/77010/2018. E/ 77216/2018, E/ 77313/2018 Bengal United Global Infrasturcture Ltd.). Of the various noticees, only the three above named appellants are in appeal in the matter.
3. On the basis of certain information received from DGCEI, KZU, Kolkata regarding irregular availment of Cenvat Credit, the authorities conducted an in depth investigation into the matter against the main noticee Gagan Ferrotech Ltd. who used to procure various inputs from upstream manufacturers/dealers for utilization of the said goods for the manufacture of their finished goods. The Department's case being that the said appellant (Gagan Ferrotech Ltd) had availed and utilized Cenvat Credit in violation of laid down legal principles merely, on the basis of paper transactions, fraudulently made without receiving goods in the factory of production.
4. During the course of investigations, various documents of the manufacturer-assessee were called for and it was noticed by the authorities that the documents submitted for the alleged raw material transportation of goods indicated carting of the said goods by way of vehicles as apparently could not be used for carting such heavy materials like Billets and Sponge Iron, or such carriers were found to be non-existent on the VAHAN Portal. The said verifications were undertaken by the Revenue on the basis of data available on the National Transport Portal VAHAN.nic.in, whereby certain vehicle numbers were found to be non-existent or registered as non-goods vehicle. Accordingly, out of a total credit of over Rs. 3 crore availed in respect of 29,000 transactions considered, the Revenue arrived at the conclusion that the Cenvat Credit to the tune of Rs. 9,09,634/- availed by the appellant would not stand scrutiny to the test of law in investigations conducted at their end, the appellant Super Smelters Metalics (P) Ltd. have submitted that they had sold sponge iron/billets to M/s. Gagan Ferrotech Ltd. under cover of more than a hundred invoices of which the alleged discrepancy is in respect of 16 consignments accounting for four vehicles in all. The department on the basis of such evidence concluded that no actual delivery of said raw 4 E/77010/2018. E/ 77216/2018, E/ 77313/2018 material sponge iron/billets did actually take place and therefore the appellants misrepresented and availed inadmissible Cenvat Credit. The Learned AR points out that even VAT was disallowed by the state VAT authorities on the basis of information supplied to the VAT department by the department, implying that there was no sale of impugned goods on which credit has been availed by the main appellant-Gagan Ferrotech. Such bland submission without specifying actual reasons, for the said course of action by the appropriate authority and outcome of investigations if any undertaken by the state government, cannot form the basis of Cenvat Credit denial particularly when accompanying evidence on record does not come to substantiate the Revenue's version beyond doubt.
5. It is noted that the Order-in-Original so passed is based on no other ground except for one mentioned supra being the sole reason to deny Cenvat Credit to the appellant. The order of the lower authority has however cited certain enquiries initiated in some cases, with the owners of such vehicles registered, to arrive at the conclusivity of their opinion/finding. The learned Counsel for the appellant No. 2 & 3, has argued that they had placed orders on the various manufacturers/dealers concerned including appellant no. 1, and have paid the necessary amounts through account payee cheques and that all transactions (including the allegedly disputed ones herein) were carried out through banking channels and that all cheques got encashed. In support of their contention, they also point out to banking statements furnished on record. Thus, it is their case that all payments were received by the supplier of the material/goods and have so also confirmed to the authorities during the course of investigations carried out, that the revenue has not been able to even allege any flow back of funds. It is a fact that the show cause notice does not allege any flow back of funds or evidence to suggest that such payments were returned back to the appellant No. 2 by the raw material supplier in disguise, cash or some other fashion. On the contrary, it is on record that the three impugned suppliers herein, have confirmed that they had supplied 5 E/77010/2018. E/ 77216/2018, E/ 77313/2018 the goods to the main appellant (Gagan Ferrotech Ltd.) against central excise invoices upon payment of central excise duty. As for the vehicle numbers mentioned in the invoices in the course of enquiry the suppliers have stated it to be a clerical error on behalf of the concerned clerk that may have got repeated over and over again, because of the fast pace working of the work methodology and clerical inefficiency. As is however not disputed by the Revenue that both the supplier as well as the recipient have admitted that the goods in question were actually supplied and received and ultimately used in the manufacture of finished goods cleared on payment of duty, it therefore emerges that the sole evidence for non-supply of raw material as based only on vehicle numbers/vehicles as materially could not be utilized for transportation of such bulky goods, is thus seriously questionable and without any independent corroboration. The said question has also come up for consideration before the Tribunal on umpteen occasions and is no more res integra.
6. The appellant has also submitted that there exist a variety of reasons for occurence of such a discrepancy, first and foremost among them being the completeness/update of the data called upon to be examined. They therefore submit that even details like the type, make, model and colour of the vehicle could also be important parameters for consideration and examination. However, vehicle details could possibly not be found on the web portal, if there is a discrepancy in entering the various parameters on the portal or else the records in themselves are not completely digitized. They also submit that at times web connectivity could also be an important aspect for consideration.
7. Another aspect of the appellants argument pertain to the very admissibility of the computerized data as obtained from the web Portal. They submit that the requirements of Section 36B of the Central Excise Act have not been met with and therefore the revenue's very evidence is of a questionable integrity and cannot be relied upon. This argument however the lower authority have addressed by stating that the data 6 E/77010/2018. E/ 77216/2018, E/ 77313/2018 information was obtained from a web-portal and was not stored in a personal computer that mandated the adherence to the provisions of the Section 36B of the Central Excise, Act. I however do not find sufficient force in the said stance of the Revenue. Any information/statement as culled out and reproduced as a document in printed form would need to satisfy the requirements of law as laid out in Section 36B, since it indeed is a facsimile copy of a document digitally maintained and certainly is a computer printout, to which the provisions of the said section would necessarily apply. The definition of the word "document" under the General Causes Act, is an inclusive one and reads as below:-
18) "document" shall include any matter written, expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means which is intended to be used, or which may be used, for the purpose of recording that matter;
Thus it is quite clear that any written matter described upon any substance by means of letters etc would qualify to be a document. The fact of usage of the term "any substance" in the said definition makes the medium, where the said information is extracted from, as very expansive. It could thus be any form of storage mechanism of the said information, whether on cloud or computers or on papers kept in a file/folder etc., as long as "letters, figures or marks" are made use of in the storage/maintenance of such information.
There can thus be no doubt that the prescriptions of law as entailed in Section 36 B of Central Excise, Act have indeed not been adhered to, by the authorities in the matter and therefore there is no meaningful credibility for the said piece of evidence and cannot constitute a reliable basis so as to sustain the demand.
8. Merely on the basis of enquiries conducted on the basis of VAHAN portal and statement of owners identified in a few of the cases of such vehicles, cannot constitute a conclusive inference to allege non-receipt of the said goods. It is a foregone conclusion that as long as the vehicle 7 E/77010/2018. E/ 77216/2018, E/ 77313/2018 is identified, to be of a non-commercial nature, the owner of the said vehicle will certainly assert its actual and non-commercial nature. Any enquiry therefore does not go into establishing the revenue's charge. This is all the more so when the transactions are substantiated through bank transactions and not an iota of doubt is cast upon their veracity. It fails the fundamental principle of economics to conclude that one would make payments through licit channels when no material supply is effected by the suppliers. Such obviously fallacious conclusions are not supported in law and that is why the rigors of Section 36B also come into play. To establish charge of clandestine activity like non receipt of goods (or supply/clearance in the case of Super Shakti Metalics Pvt. Ltd.) there ought to be clearly identifiable cogent conclusive and tangible evidence. The revenue has not disputed receipt of payment by the suppliers for the raw-material allegedly supplied, as also the transportation charges made by the recipient of the raw material. The Learned Commissioner (Appeals) has held that "the contention of making payments through account pay checks or RTGS also did not hold good" and observed that M/s. Gagan Ferrotech Ltd. was a regular customer of the supplier company and adjustment of such payments against other supplies was not a very difficult task. I am afraid that this assumption cannot be the underlying basis to sustain a grievous charge of mis-declaration and non-receipt of raw material, on which undoubtedly Cenvat Credit has also been availed. It is noted that no discrepancy at even a single place with regard to incorporation of the goods in various accounts like RG-23 A Part I or Part II or the DSA or Raw material register or even ER-1 return filed have been pointed out or ascertained by the revenue. Also no case of short receipt or excess stocks of finished goods or any other transactional evidence has been placed on record in support by the Revenue vis-à-vis the banking transactions. This leads to the inevitable conclusion that the claims of the revenue are completely unfounded and baseless and therefore fail on the touchstone of legality of the evidence relied upon.
8E/77010/2018. E/ 77216/2018, E/ 77313/2018
9. The impugned question as arises in the matter is also settled by Quasi/judicial rulings in a plethora of cases laws, some of these are indexed here under for records:-
(i) Hiren Aluminium Ltd. Vs. Commissioner of Central Excise, Valsad-2009 (245) ELT 386 (Tri.-Ahmd.). In identical settings of the factual premise relying on the P & H High Court judgment in the case of Commr. vs Shakhti Roll Cold Strips Pvt. Ltd. 2008 (229) ELT 661 (P & H), the Tribunal had held that merely because vehicle numbers mentioned in some of the invoices were not of transport vehicles, the said piece of evidence was not sufficient to deny Cenvat Credit, when there is evidence of receipt and utilization of inputs and no evidence of diversion of goods was discernible.
(ii) Commissioner of Central Excise, Ludhiana Vs. Paramatma Singh Jatinder Singh Alloys Pvt. Ltd. 2011 (266) ELT 67 (Tri.-Del.) It was held therein that wrong vehicle numbers cannot be made the basis for denial of credit where the payment for inputs supplied were made through cheques and inputs entered in the statutory records and utilized in the manufacture of final product that were cleared on payments of duty.
(iii) HBR Steel Corporation Vs. Commissioner of Central Excise, Ludhiana- 2008 (225) ELT 102 (Tri.-Del.), wherein it was confirmed in the oral testimony both by the raw material supplier and the recipient of the goods that modvatable invoices were issued, goods supplied and received, transactions were by way of cheque payments and there was no material on record to indicate that incorrect entry of particulars was willful, the Tribunal ruled out imposition of any penalty.
(iv) Grace Casting Ltd. Vs. Commissioner of Central Excise & Service Tax, Ahmedabad-III- 2019 (369) ELT 751 (Tri.-Ahmd.) In this case the RTO reports, that vehicles 9 E/77010/2018. E/ 77216/2018, E/ 77313/2018 impunged were such as were not capable of transporting heavy goods were given goby, as the said goods were found to be recorded in Cenvat accounts-RG-23A, purchase of goods booked in books of accounts and payments made through cheques, with their being no evidence of diversion of goods.
Factual situation is quite akin even in the present matter.
10. The appellant, Deepak Kumar Agarwal, Director of firm at appellant no. 2, has cited the following case law, questioning the penalty imposed on him.
(i) Naveen Jain Vs. Commissioner of Central Excise, Kanpur-2014 (302) ELT 241 (Tri.-Del.) According to him no penalty is thus leviable on the appellant Director. I have gone through the said case law and agree that the ratio of said case is squarely applicable to him in the present matter.
11. Under the circumstances, there is lack of legal merit in the order of the lower authority, denying the cenvat credit availed and the same is therefore set aside. Penalties as imposed on the various appellants herein are also clearly not sustainable and are required to be dismissed. All the three appeals are allowed with consequential relief, if any, as per law.
(Pronounced in the open court on 07/01/2026.) Sd/-
(Rajeev Tandon) Member (Technical) Pooja