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PJ/CASE LAW/2015-16/2882

Denial of cenvat credit on the inputs without sound allegations.

Case:- COMMISSIONER OF C. EX. & CUS., AURANGABAD VERSUSINDIA CONTAINERS LTD.
 
Citation:- 2015 (321) E.L.T. 473 (Tri. - Mumbai)
 
Brief facts:-This appeal is directed against the Order-in-Original No. 03/CEX/2000, dated 14-2-2000 vide which the adjudicating authority has set aside the demand of the duty of Rs. 27,91,555/-.
The respondent is absent despite notice. Since the issue is of 2001, they take up the appeal for disposal in the absence of any representation from the respondents.
The issue involved in this case is regarding denial of Modvat credit/Cenvat credit to the appellant on the inputs which were received by them and it was alleged that the said inputs could not have been used by the respondents for the manufacture of final products. The more specific allegations are that the respondents had procured inputs i.e. Tin Sheets/Tin Plates of which no thickness was mentioned on the invoices. It was further alleged that respondent could not have used tin plates of thickness of more than 0.24 mm. The adjudicating authority after considering the evidences produced before him came to the following conclusion -
“as regards to the amount mentioned in Annexure “B-3” of show cause notice for an amount of Rs. 27,91,555/-, the show cause notice itself do not specify the thickness therefore the allegations against the assessee are not sustainable and the remand to this extent cannot be confirmed”.
The adjudicating authority on the above findings set aside the demand raised on the respondent for the amount. The revenue is in appeal against such setting aside of the demand.
 
Appellant’s contention:- The ld. DR took them through the entire show cause notice and also through Annexure “B-3” to the said show cause notice. It is his contention that it was for the assessee to lead evidence as regards the thickness of the said tin plates for availing Modvat credit/Cenvat credit. It is his submission that the assessee never disputed that the invoices did not have thickness of the tin plates mentioned on them. He submits that the absence of non-mentioning of thickness on the invoices, it has to be presumed that the assessee has not used the tin plates received by him under invoices as mentioned in the said annexure.
 
Respondent’s contention:- None appeared on behalf of respondent.
 
Reasoning of judgment:- Considered the submissions made at length by the ld. DR and perused the records. It is seen from the records that the appellant has been receiving tin plates of various thickness for manufacturing of cans. The allegation in Annexure “B-3” to show cause notice is categorical, in as much that the credit is sought to be denied on the ground that the thickness of the tin plates is not mentioned. There were various allegations against the appellant and confirmation of the duty in respect of another allegations regarding credit availed on tin plates having thickness ranging between 0.24 mm to 0.45 mm and thinner. The adjudicating authority in the very same order-in-original had held that the appellant could not have used the tin plates which were having thickness ranging between 0.30 mm and thinner and 0.45 mm and thinner. Against the said confirmation of demand, the assessee came in appeal before the Tribunal in appeal No. E/1369 to 1372/2000. The Tribunal vide its Order No. C-I/551-554/WZB/2003, dated 28-2-2003, in respect of the allegations in Annexure “B-2” held as under” -
(b)Credit availed on tin plates having thickness ranging between 0.30 mm & thinner to 0.45 & thinner amounting to Rs. 23,87,575/-.
We have perused Annexure B.2 for this demand and accept the appellants’ contention that the description of inputs in this annexure can also cover inputs (tin sheets/tin plates) below 0.24 mm in thickness, particularly in the absence of any independent findings that these inputs were found to be of thickness in excess of 0.24 mm. We, therefore, set aside this demand as unsustainable”.
It can be seen from the above reproduced order of the Tribunal, that the credit of the duty, as plates having thickness of 0.30 mm and thinner 0.45 mm and thinner, were available to the assessee. In the current appeal by the Revenue before them, the case of the assessee is on a stronger footing. The allegation of the show cause notice itself does not enthuse confidence that the assessee could not have used the tin plates as mentioned in Annexure “B-3”. There is no allegation in the show cause notice that the respondent had not received the said tin plates as mentioned at Annexure”B-3”.
As such, they find that the very same order-in-original in respect of an identical allegation has been set aside by the Tribunal in the respondent’s own case. Respectfully, following the same, they find no merits in the appeal filed by the Revenue. The appeal is rejected.
 
Decision:- Appeal rejected
 
Comment:- The essence of the case is that cenvat credit cannot be denied unless there is no evidence of inputs having not been received or used in manufacture. At the time of issuance of show cause notice nothing is mentioned of thickness in show cause notice and credit is being denied solely on the ground that the assessee could not have used tin plates of thickness of more than 0.24 mm. The allegation of the show cause notice itself does not enthuse confidence that the assessee could not have used the tin plates. Therefore, the credit was allowed.

Prepared by:- Monika Tak 

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