Custom, Excise & Service Tax Tribunal
Commissioner Of Customs & vs M/S. Juhi Alloys Ltd on 1 July, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Excise Appeal No. 3625 3627 of 2010-Ex (SM) [Arising out of Order-In-Appeal No 405-407/CE/APPL/ KNP/2010 dated 13.8.2010 passed by Commissioner (Appeals), Customs & Central Excise (Appeals), Kanpur] 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? 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Commissioner of Customs & Appellants Central Excise, Kanpur Vs. M/s. Juhi Alloys Ltd. Respondent
Shri Anil Kumar Shukla, authorised signatory Shri Yogesh Agarwal, Director Appearance:
Shri R.K. Sharma, AR for the Appellant
Shri Jitin Singhal, Advocate for the Respondents
CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial)
Date of Hearing : 11.06.2013
Date of Decision : 01.07.2013
ORDER NO .FO/ 56813-56815/ 2013-Ex(SM)
Per Archana Wadhwa (for the Bench):
All three appeals filed by the revenue are being disposed of by a common order as they arise out of same impugned order passed by Commissioner (Appeals) vide which he has set aside the confirmation of denial of Cenvat credit of Rs.1,62,217/- and imposition of penalty of identical amount upon M/s. Juhi Alloys Ltd. and the penalties of Rs.10,000/- and Rs.2,000/- imposed upon Shri Yogesh Agarwal, Director and Shri Anil Kumar Shukla, authorised signatory.
2. As per facts on record, M/s. Juhi Alloys Ltd. is engaged in the manufacture of MS bars, rounds, SS Flat and SS products. They were availing Cenvat credit of duty paid on the inputs i.e. MS ingots. The same were being procured by the said assessee from a registered dealer M/s. M K Steel, Kolkata.
3. Certain inquiries were conducted at the end of M/s. M K Steel and it was found that they were showing procurement of the goods from a manufacturer M/s. Sarla Ispat (P) Ltd., Durgapur, West Bengal. Further, inquiries revealed that invoices issued by M/s. Sarla Ispat (P) Ltd., were fake invoices and as such, M/s. Sarla Ispat (P) Ltd., was not inexistence.
4. Based upon above proceedings were initiated against the present respondents proposing to deny the Cenvat credit on the ground that M/s. M K Steel has received the inputs from M/s. Sarla Ispat (P) Ltd., which was non-existent and as such, the invoices issued by him as registered dealer were fake invoices and the recipient of the inputs were not eligible to avail the Cenvat credit. Such proceedings resulted in passing of an order by the original adjudicating authority, confirming the demand and imposition of penalties. However, on appeal, Commissioner (Appeals) set aside the said order in original and allowed the appeal. Hence, the present appeal by the Revenue.
5. I have heard both sides, duly represented by Shri R K Sharma, learned AR appearing for the appellant and Shri Jitin Singhal, learned advocate appearing for the respondent.
6. On going through the impugned order of Commissioner (Appeals), I find that he has held M/s. Juhi Alloys Ltd., recipient of the inputs from M/s. M K Steels, eligible to avail Cenvat credit inasmuch as the invoices issued by M/s. M K Steels are the proper invoices and M/s. Juhi Alloys have taken due precaution in terms of Rule 7(4) of Cenvat Credit Rules, 2002 and Rule 9(5) of the Cenvat Credit Rules, 2004. The said recipient has placed orders on M/s. M K Steel for procurement of the raw materials through a broker. It is also not in dispute that the said inputs covered by the invoices raised by M/s. M K Steels Ltd. stand received by M/s. Juhi Alloys and duly entered in their Cenvat credit account. They have further been used in the manufacture of final product of M/s. Juhi Alloys which stand cleared on payment of duty by them. The appellate authority has observed that a buyer can take steps which are in their control and he cannot be expected to verify the records of the suppliers broker to check whether infact the supplier has paid duty on the goods supplied by him or not. As such, he has relied upon the Boards Circular being Circular No. 776/82/03-CX dated 15.12.03 laying down that as long as bonafide nature of the consignee transaction is not doubted, credit should not be denied. He has also relied upon various decision of the Tribunal to hold that the recipient of the inputs, where all the legal formalities stand complied with, would be entitled to Cenvat credit of duty.
7. I find Revenue is not disputing the fact that M/s. M K Steels raised dealers invoice, giving all the particulars required to be given under law in the invoice supplied to the respondents. It is also not being disputed that the respondent received inputs and entered the same in their records. The said inputs were further used by them in the manufacture of their final product, which were cleared by them on payment of duty. It is also a part of the record that the goods traveled from the dealer premises to the respondents premises under the cover of form 31 of UP Trade Tax department. This fact is sufficient to prove the physical entries of the inputs in the assessees premises. Further, the ledger account and RG 23 A records maintained by the assessee also proves the receipt of the goods. Further, the payment of the said inputs stand made by the recipient through cheque.
8. In terms of the provisions of Rule 7(4) of Cenvat credit Rules 2002 and Rule 9(5) of Cenvat credit Rules, 2004, a manufacturer is required to check the particulars as mentioned in the invoice issued by the first stage dealer and he should be familiar with him. As rightly observed by Commissioner (Appeals), it is not only possible but impractical also for an assessee to further check the records maintained by the first stage dealer and to verify correctness of the same. It is sufficient if the assessee buys the goods from first stage dealer whose status he has checked and verified. There is no dispute in the present case that M/s. M K Steels was registered as a dealer with the Revenue and the invoices issued by him reflected his registration number. As such, I fully agree with the finding of the appellate authority that denial of credit to the respondent manufacturing unit on the ground that first stage dealer has fraudulently received the goods is neither proper nor justified. Reliance by the appellate authority on various Tribunals decision is proper.
9. In view of the above discussion, I reject all the appeals filed by the Revenue.
(Pronounced in the court on 01.07.2013 )
( Archana Wadhwa ) Member(Judicial)
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