By TIOL News Service

MUMBAI, JULY 09, 2014: THE appellant was denied CENVAT credit of Rs.20,94,889/- on the ground that capital goods on which the credit had been taken were neither found to be received in the factory nor reflected in the IT returns in Form 3CD and the balance sheet. The absence of capital goods was noticed during the audit of the records of the appellant in August/September 2008 and also during the search of the premises conducted by the department on 06/03/2012 under a panchnama.

As the lower authorities upheld the demand and imposition of penalty and interest, the appellant is before the CESTAT.

It is submitted that the goods had been removed prior to the panchnama proceedings and, therefore, the panchnama proceedings could not be relied upon.

To ascertain the factual position, the Bench had requested the appellant to produce a copy of the assets register maintained by the factory with regard to the installation and use of capital goods.

A copy of the assets register was produced and on seeing the same, a doubt arose about the genuineness of the document and, therefore, the Bench had directed the appellant to produce the original asset register, which was produced during the hearing held recently.

The CESTAT, thereafter, observed -

“On a perusal of the said register and the entries made therein, it is seen that the entries are in the same handwriting using the same ink and all of them appear to be of the same age, that is, made more or less at the same time. Since the entries pertain to the period 2005 to 2009, all the entries cannot be uniform and having the same colour of ink, having the same brightness. We further notice that even though there are columns for “physical verification and by whom”, no such verification appears to have been done during the whole period which appears quite strange. Therefore, it prima facie appears that the document now produced before us is a manipulated/cooked up one and, therefore, cannot be accepted as a reliable evidence.”

Noting that the appellant had not come with a clean hand in appeal and in the absence of any evidence of having received and installed the capital goods in the factory, the Bench held that the appellant had not made out any case for grant of stay.

The appellant was directed to deposit the entire duty demand confirmed along with interest and report compliance for obtaining a stay in the matter.

(See 2014-TIOL-1229-CESTAT-MUM)