Grace Casting Ltd. Vs C.C.E. & S.T. (CESTAT Ahmedabad)
The appeals before the CESTAT Ahmedabad arose from an order confirming demand of Cenvat credit, interest and penalties against Grace Castings Ltd. and its Director on the allegation that the company had fraudulently availed Cenvat credit on invoices issued without actual receipt of raw materials. The investigation relied upon RTO reports indicating that several vehicle numbers mentioned in the invoices corresponded to vehicles incapable of transporting the goods, statements of certain transporters denying transportation, and statements of some weighbridge owners denying the weighment slips. A show cause notice was issued and the adjudicating authority confirmed the demand, which was upheld by the Commissioner (Appeals).
Before the Tribunal, the appellant contended that the department’s case rested primarily on RTO reports and statements of only two transporters despite involvement of 36 transporters and 2,451 consignments. The disputed consignments covered only about 521.99 MT out of approximately 41,030 MT of raw materials procured during the relevant period. The appellant submitted that suppliers had never denied supply of goods or receipt of payment, the inputs were duly entered in statutory records, payments for goods and transportation were made through banking channels, finished goods manufactured from those inputs were cleared on payment of duty, and there was no evidence that goods covered by the invoices had been diverted elsewhere or that alternative unaccounted inputs had been procured. The appellant also relied on several judicial precedents in support of its case.
