Custom, Excise & Service Tax Tribunal
C. C.E. Lucknow vs M/S. Premier Alloys Ltd on 15 July, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Excise Appeal No. E/2190-2192/2009-E[SM]
[Arising out of Order-In-Appeal No. 100-102-CE/LKO/2009 dated 01.05.2009 passed by CCE (Appeals) Lucknow]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, 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?
C. C.E. Lucknow ...Appellant
Vs.
M/s. Premier Alloys Ltd. Respondent
Sh. Sanjay Kumar Jain (Director) Sh. Vijay Kumar Jain (Director) Appearance:
Mr. R K Grover, DR for the Appellant Mr. Amit Bishnoi, (Advocate) for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing. 15.07.2015 Final Order No. 54285-54287 /2015_ Per S K Mohanty:
These appeals are directed against the impugned order dated 01.05.2009 passed by the Commissioner (Appeals), Central Excise and Service Tax, Lucknow, wherein the adjudication order was set aside and the appeals were allowed in favour of the respondent herein.
2. Brief facts of the case are that the Anti Evasion Wing of Central Excise Commissionerate, Kolkata-II, investigated the matter of issuance of fake invoices by the fraudulent dealer M/s M.K. Steels, whereby he facilitated availment of illegal Cenvat credit by the manufacturers. On the basis of Circular dated 22.06.06 issued by the Commissioner of Central Excise-Kolkata-II, the Jurisdictional Central Excise Authorities at Lucknow investigated the matter at the factory of the respondent and initiated proceedings on the ground that wrong Cenvat credit has been taken based on the fraudulent invoices issued by the supplier of goods. Service tax demand confirmed and penalty imposed in the adjudication order was set aside by the Commissioner (Appeals), holding that the goods covered under the disputed invoices were received by the respondent.
3. The Ld. DR, Sh. R K Grover appearing for the Revenue submits that denial of cenvat credit by the adjudicating authority is in conformity with the cenvat stature inasmuch as the respondent has not taken any reasonable steps to ensure that the duty has actually been paid on the goods allegedly received in the factory. He further submits that since the respondent has not produced the documents evidencing receipt of goods in the factory, taking of cenvat credit based on the bogus invoices is contrary to the statutory provisions.
4. Countering the submission made by the Revenue, Sh. Ankit Bishnoi, the Ld. Advocate for the respondent submits that based on the documents such as, Form 31 issued by Trade Tax Department, Copy of ledger accounts showing inward freight paid by the Respondent for transportation of the goods, Ledger account evidencing payment by cheque made to the supplier of goods, since the Commissioner (Appeals) has allowed the appeal of the Respondent, the same cannot be questioned or agitated by the Department, without producing any tangible evidence that the goods have not been received by the respondent for use in the intended purpose. To support his submission that Cenvat credit cannot be denied to the respondent, the Ld Advocate has relied on the judgment of Allahabad High Court in the case of CCE vs Juhi Alloys Ltd., reported in 2014 (302) ELT 487 (Albd).
5. I have heard the Ld. Counsel for both sides and perused the records.
6. I find that upon proper analysis of the documents submitted by the Respondent, since the Ld. Commissioner (Appeals) has arrived at the conclusion that the appellant (respondent herein) had in fact received the goods covered under the disputed invoices, maintainability of the impugned order cannot be questioned at this juncture, especially in view of the fact that the Revenue has not brought on any tangible evidence to prove non-receipt of the goods by the respondent. Further, I find that in an identical set of facts, involving the same supplier M/s M K Steel (P) Ltd., the Honble Allahabad High Court in the case of M/s Juhi Alloys (Supra) have dismissed the appeal filed by the Department, holding that once the goods have been received by the recipient under the cover of duty paid documents for use in the intended purpose, the genuineness of the said documents cannot be questioned by the Department. The relevant paragraph in the said judgment is extracted herein below:
7.?In the present case, both the Commissioner (Appeals) and the Tribunal have given cogent reasons to indicate that the assessee had taken reasonable steps to ensure that the inputs in respect of which he has taken the Cenvat credit are goods on which the appropriate duty of excise, as indicated in the documents accompanying the goods, has been paid. Admittedly, in the present case, the assessee was a bona fide purchaser of the goods for a price which included the duty element and payment was made by cheque. The assessee had received the inputs which were entered in the statutory records maintained by the assessee. The goods were demonstrated to have travelled to the premises of the assessee under the cover of Form 31 issued by the Trade Tax Department, and the ledger account as well as the statutory records establish the receipt of the goods. In such a situation, it would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee, in the present case, was found to have duly acted with all reasonable diligence in its dealings with the first stage dealer.
The view which the Tribunal has taken is consistent with the judgment of Jharkhand High Court in Commissioner of C. Ex., East Singhbhum v. Tata Motors Ltd. - 2013 (294) E.L.T. 394 (Jhar.), where it was held as follows :-
... Once a buyer of inputs receives invoices of excisable items, unless factually it is established to the contrary, it will be presumed that when payments have been made in respect of those inputs on the basis of invoices, the buyer is entitled to assume that the excise duty has been/will be paid by the supplier on the excisable inputs. The buyer will be therefore entitled to claim Modvat credit on the said assumption. It would be most unreasonable and unrealistic to expect the buyer of such inputs to go and verify the accounts of the supplier or to find out from the department of Central Excise whether actually duty has been paid on the inputs by the supplier. No business can be carried out like this, and the law does not expect the impossible.
7. In view of above, I do not find any infirmity in the impugned order passed by the Commissioner (Appeals). Therefore, the appeals filed by Revenue are dismissed.
(Dictated and pronounced in open court) (S. K. Mohanty) Member (Judicial) Neha Page | 4