Whether Cenvat credit can be deny in case of non-availability of documents which are not the prescribed documents in terms of the Cenvat Credit Rules?

PJ/CASE LAW/2016-17/3064

Case:- VEER-O-METALS PVT. LTD. Versus COMMISSIONER OF C. EX., BANGALORE-III
Citation:- 2016 (331) E.L.T. 475 (Tri. - Bang.)
Issue:- Whether Cenvat credit can be deny in case of non-availability of documents which are not the prescribed documents in terms of the Cenvat Credit Rules?
Brief Facts:-The appellant is engaged in the manufacture of sheet metal enclosures, pressed components, mechanical assemblies, etc., classifiable under Chapters 84 and 85 of the Central Excise Tariff Act, 1985. They were also availing the benefit of Cenvat credit of duty paid on the inputs received by them and utilised in the manufacture of their final product. The appellant’s factory was visited by the Central Excise officers, who conducted various checks and verifications. On scrutiny of the documents, it was found that though the appellant was maintaining Goods Receipt Notes (GRNs) for receipt of the goods at the factory gate and the BIN Cards for showing issuance of the materials, such documents were not available in respect of 11 invoices. As such, the visiting officers entertained a view that the appellant has availed the Cenvat credit without actually receiving the inputs. The statement of one Shri Jayaram who was in-charge for maintaining the said BIN cards was recorded who could not confirm the accountal of the goods. On the abovebasis, proceedings were initiated against the appellant by way of issuance of a show cause notice alleging wrong availment of Cenvat credit availed during the period June, 2007 to January, 2008. The said proceedings culminated into an order passed by the Additional Commissioner, confirming the demand along with confirmation of interest and imposing penalty of identical amount. The said order stands upheld by Commissioner (Appeals). Hence the appellant has filed appeal before Tribunal.
Appellant’s Contention:- The appellant submits that they receive around 1200 invoices in a year and maintain all the requisite documents. Non-maintenance of GRNs and BIN cards in respect of 11 invoices out of huge number of 1200 invoices cannot be adopted as a ground for denial of the credit by arriving at a finding that only invoices were received without the corresponding receipt of inputs. He submits that such inputs were duly accounted by them in their Cenvat credit account and used in the manufacture of the final product, which was cleared on payment of duty. Such clearances of final product were not possible without the receipt of the inputs. He submits that there being no other evidence on record reflecting upon the non-receipt of the inputs, the Revenue’s case is liable to be rejected.
Respondent’s Contention:- Learned AR appearing for the Revenue reiterates the findings of the lower authorities.
Reasoning of Judgment:- The Tribunal considering the submissions made by both the sides, finds that the credit availed by the appellant in respect of 11 invoices stands denied on the sole ground that there are no corresponding GRNs and BIN cards. The appellants have explained that out of the huge number of invoices being received by them, such non-maintenance or non-availability of GRNs and BIN cards cannot be held to be leading to the conclusive findings of non-receipt of inputs. They find force in the above contention of the learned advocate. The Revenue has not made any enquiries from the sender of the inputs, as reflected in the invoice. The appellants have recorded the invoices, inputs along the available Cenvat credit in their statutory records. They also find force in the appellant’s contention that in the absence of the inputs in question, corresponding final products could not have been manufactured by them. The non-availability of the said documents which are not even the prescribed documents in terms of the Cenvat Credit Rules and the purpose of which is only to show the receipt of the materials at the factory gate, cannot be held to be conclusive evidence so as to arrive at a finding of the non-receipt of the goods. In the absence of any corroborative evidence, they find no merits in the Revenue’s stand. Accordingly, the impugned orders are set aside and the appeal is allowed with consequential relief to the appellant.
Inasmuch as the appeal stands allowed on merit, the plea of limitation raised by the assessee is not being adverted to.
Decision:- Revenue’s order set aside and assessee’s appeal allowed with consequential relief.
Comments:- The Tribunal has decided the case that the revenue has not produce any corroborative evidence against the assessee. Even the revenue has not made any enquiries from the sender of the inputs, as reflected in the invoice. The tribunal also consider that the non-availability of the said documents which are not even the prescribed documents in terms of the Cenvat Credit Rules and the purpose of which is only to show the receipt of the materials at the factory gate, cannot be held to be conclusive evidence so as to arrive at a finding of the non-receipt of the goods

Comments

PJ/CASE LAW/2016-17/3064

Post a Comment

Query