Commissioner of C.G.S.T. And Central Excise Vs C.P. Re-Rollers Limited (CESTAT Kolkata)
The appeal before the Tribunal arose from an order passed by the adjudicating authority which had dropped proceedings initiated against the respondent in relation to alleged irregular availment of CENVAT credit and issuance of invoices without actual supply of goods. The Revenue challenged this order, contending that the adjudicating authority had erred in dropping the demand of central excise duty amounting to ₹1,28,39,192 along with applicable interest and penalty.
The case originated from intelligence inputs indicating that the respondent company had availed and utilized CENVAT credit without actual receipt of raw materials, namely M.S. Scrap, from a dealer. It was further alleged that the respondent issued central excise invoices to the same dealer without physically supplying goods. A search conducted on 17.01.2017 at the respondent’s factory led to examination of records, which showed that during the financial year 2014–15, the respondent had availed CENVAT credit of ₹97,93,739 based on invoices issued by the dealer. It was also found that invoices were issued showing clearance of 3360.400 metric tonnes of TMT bars involving duty of ₹1,28,39,192.
Statements were recorded during the investigation. The proprietor of the dealer stated that all transactions were merely book entries and that no physical movement of goods had taken place. However, the respondent’s representative did not accept this statement. Based on these findings, the Department alleged that invoices had been issued without supply of goods and that the respondent had engaged in irregular practices.
