++ Summons were issued to all transporters whose vehicle nos. were appearing in the invoices, but only one appeared and denied having transported the scrap, whereas two other transporters informed by letters that on the said date, their vehicle had been engaged for some other work. Other transporters either did not respond or were not served the summons. In the case of Dashmesh Casting Pvt. Ltd. it was held by Tribunal that non-production of octroi receipt by itself cannot be the sufficient basis to conclude that the goods were not actually transported. It is further laid down in the said ruling that for minor discrepancies or clerical error in the document, it does not justify drawing of adverse inference that no goods were carried or transported.
++ The respondents had nothing to do with the transportation of scrap from Bhavnagar etc. to the dealer's premises and further to their premises therefrom.
++ The transportation of scrap from the supplying dealers premises/godown to their factory was arranged for and paid by the supplying dealers &have not been controverted by the adjudicating authority in the Order-in-Original. Further, there are 146 invoices in question in case of Jay Iron-respondent and only on account of denial of the facts of transportation by 5-6 vehicle owners/drivers, adverse inference has been drawn by the Adjudicating authority. Similarly, in the case of respondent JCPL wherein 129 invoices are in question and only one vehicle owner/driver appeared and denied and two vehicle owners responded by mail, who were examined in the adjudication proceedings and never produced for cross-examination and it is not clear as to on what grounds the statements or communications of a few can be made applicable to all the supplies received against the remaining majority of the invoices.
++ Further, the statements have been found to be recorded after prolonged time (more than two years) from the date of transaction and the statements were given on the basis of memory without reference of any record.
++ The investigating officers did not obtain any confirmation from the record of the supplying dealers that these were the same vehicle(s) to whom the payment was shown to have been made by them for transportation. In case of large no. of invoices, possibility of clerical error in a few, cannot be completely ruled out and it could have been the case of mistaken identity. Further, the adjudicating authority had failed in exercising the jurisdiction vested in him as he has not tried to ensure appearance and collection of evidence from the majority almost 97% of the vehicle owners, who did not appear on receipt of summons and/or summons could not be served.
++ It is settled law that substantial benefit granted by the Cenvat Credit Rules cannot be denied on technical/clerical mistake occurred in few invoices after incomplete investigation.
++ As regards the next reason that there being some invoices bearing parallel no. as issued to other consignee/buyers of the said supplier, it is noted by Commissioner (Appeals), as against 146 invoices, 77 invoices had parallel sr. no. and as against 129 invoices in case of JCPL, 66 invoices bear parallel sr. no. As regards finding in the Order-in-Original that the RG-23D numbers given in the invoices received by the assessee are not tallying with the figures in the RG-23D register of the said dealer, the show-cause notice only indicated that the RG-23D (page no.) appearing on the invoices issued to the respondent and the parallel invoices issued to other parties/buyers were different. Thus, it is found that the adjudicating authority have travelled further beyond the allegation in the show-cause notice without any tangible evidence on record. It was further noted that there is no similarity between the two set of invoices. The quantity, value and duty appearing on the two parallel invoices is completely different. The allegation also contradicts the other allegation that in the first place, the dealers themselves had not brought any material and secondly had not dispatched any material (scrap) to other parties including the respondents. It is further found that the investigation have not come to any definite conclusion. Merely raising doubt and that too which are self contradictory in nature, demolishes the case of Revenue.
++ Benefit of CENVAT Credit, being substantial benefit granted by law, it cannot be denied on flimsy ground like, suspicion or presumption, as the same cannot take the place of proof. It is further seen that the adjudicating authority have drawn erroneous conclusion in concluding that the respondent have not received the inputs in their factory, in question, and have, therefore, taken wrong credit. It is further found that the respondents on receipt of the inputs in question, under the normal course of business, had prepared ‘goods received note' and made entries in the statutory records maintained by them.
++ Further, the stock of scrap/physically present in the factory of respondents could have been easily verified with the records which was not done and receipt of the inputs is erroneously being disputed on the basis of the investigation against the supplying dealers, which is found to be wrong and untenable. Further, the investigation is silent as to how the respondent-manufacturers, manufactured finished material without receiving the inputs. The law is settled that as long as duty payment is accepted on output, the benefit of credit available in law cannot be denied.
++ It is observed that the respondent had made full payment of duty indicated in the invoices by cheque, which have been rejected on the ground that it is not established that the payments made to the supplying dealers pertain to the purchase transaction in the question. It is further noted that the respondent - Jay Iron has made payment of more than Rs. 2 crores (approx) over nearly three years to the supplying dealers and the respondent JCPL had also made payment of more than Rs. 2 crores over nearly 6 months period. Further, the transaction and payments etc. are properly recorded in the Books of Account. Ledger etc. Thus it is established that the payments were made against supply of scrap.
++ It is further noted that it is not the case of Revenue that part of the payment was returned to the respondent as a notice or reward for connivance, and accordingly, it is held upholding the finding by the appellate authority that the extended period is not attracted in absence of any fraud, collusion or connivance on part of the respondents.
++ It is observed that the manufacturer/respondent before taking credit on input have discharged onus under Rules 9(2), 9 (3), 9(4) & 9(7) of Cenvat Credit Rules to take all reasonable steps to ensure that the inputs in respect of which cenvat credit is taken, are goods on which the appropriate duty of excise has been paid. The Explanation to the sub-rule further clarifies that the manufacturer/respondent shall be deemed to have taken reasonable steps, if it has satisfied himself about the identity and address of the manufacturer/suppliers, as the case may be, issuing the documents/invoices evidencing the payment of excise duty, either from his personal knowledge or on the basis of certificate issued by the Superintendent of Central Excise.
++ Both the suppliers being registered dealers with the Department were carrying on the business from their registered premises for a number of years and the identity and address of the suppliers/dealers were never in doubt and the finding of the lower authority that the respondent did not take reasonable step is contrary to the records and accordingly held unsustainable.
