CENVAT - Non-receipt of goods along with invoice - It would be impractical to require assessee to go behind records of first stage dealer - allegation made on basis of statement given by supplier but no probe conducted - Appeal allowed: CESTAT
By TIOL News Service
NEW DELHI, APR 14, 2015: THE facts are that DGCEI conducted investigation at the end of M/s. Psondia Steel Profile. Ltd. and in his statement the DGM submitted that they are receiving HR coils from Steel Authority of India; that their factory is closed and they issued invoices of HR coils and CR strips to various dealers but without delivery of the goods.
Further investigation was done at the end of the dealers namely M/s. Bhagwati Trading and Ayushi Steel Co. Ltd. when the Director and Proprietor submitted that they have received inputs from PSPL and issued invoices to various persons, which names do not include the appellant.
On the basis of statement of manufacturer of goods and the dealer supplier,DGCEI issued a SCN to the appellant to deny Cenvat credit on the invoices issued by M/s. Bhagwati Trading & Co. and Ayushi Steel alleging that invoices have been issued but no goods had been received.
As the credit has been denied, the appellant is before the CESTAT.
The appellant inter alia submitted that they had physically received goods along with invoices issued by the dealer which has been transported through tractor trolley etc. and same has been used in the manufacture of final product which has been cleared on payment of duty. The payment of inputs has been made by account payee cheque. Further, no investigation was conducted by the DGCEI and no corroborative evidence has been produced by the Revenue except statement of supplier and dealer to allege that appellant has received invoices but not the goods. Further, no cross-examination was granted to the appellant by the lower authorities.
The AR submitted that when the statement of manufacturer supplier is that they have not supplied any goods and only issued invoices, there is no requirement of any corroborative evidence; that it is the duty of the appellant to prove that they have received the goods physically. In these circumstances, appeal is to be dismissed.
The Bench distinguished the case laws cited by the AR & also observed -
+ The main contention of the appellant is that they have received the goods along with invoices and the same have been used in the manufacture of final products. The payment of inputs has been through account payee cheque. No investigation was conducted at the end of appellant, no cross-examination of the supplier of goods or manufacturer was granted to the appellant.
+ Out of 9 invoices, only 6 invoices pertain to PSPL who has admitted that they have issued invoices. Further PSPL has also denied that HR coils have been supplied along with invoices. But no corroborative evidence reveal any proof that the goods received by the appellant were not containing invoices with them.
+ No investigation has been conducted whether vehicles involved in these cases are capable of carrying the impugned goods or not.
+ It would be impractical to require the assessee to go behind the records maintained by the first stage dealer. The assessee has duly acted with all reasonable diligence in its dealing with the first stage dealer within the meaning of Rule 9(3) of CCR, 2004. Admittedly in this case the allegation has been made against the appellant on the basis of statement given by the manufacturer, dealer / supplier of the goods, but no investigation has been conducted at the end of the appellant.
+ Moreover, there is no discrepancy in the invoices issued to the appellant and all the payments were made through account payee cheque.
Holding that the Revenue had failed to prove their case with supporting evidence, the order was set aside and the appeal was allowed with consequential relief.
(See 2015-TIOL-667-CESTAT-DEL)
