Case Law Details
AIC Iron Industries Private Limited Vs Commissioner of CGST & CX (CESTAT Kolkata)
The first issue involved in this case is whether the Appellant had availed irregular CENVAT Credit as arrived by the Department holding that it was paper transaction without receipt of raw materials. Second issue is whether under the circumstances and the facts on record, extended period of limitation can be invoked. I find that there is no other evidence on record of cash flow-back or any inculpatory statement to substantiate that CENVAT Credit was taken irregularly based on paper transaction i.e. without receipt of raw materials against invoices. I find that the statements of the transporters are not corroborated with any evidence. Only on the basis of third party’s statement, demand cannot be made.
I also find that it is an undisputed fact that all the purchases were duly recorded in the statutory books of the Appellant and the goods were also found to be entered in the statutory records of the Appellant. There is no evidence which can show that the records maintained by the Appellant are not correct. Only on the basis of statement of some of the transporters, the credit is sought to be disallowed whereas the statements are in isolation with any corroboration. Therefore the entire demand of excess CENVAT Credit in absence of any corroborative evidence is nothing but based on presumption which is not permissible under the law. I find that the Appellant is duly registered with the Department and there is no allegation in the impugned order of non-submission of any periodical returns. The Appellant is subject to regular audits. Therefore, the allegation of suppressing the facts from the Department does not hold good in the event of periodic audits of the Appellant’s records. There is no other evidence in the impugned order to show that the Appellant has willfully suppressed the fact from the Department in order to evade payment of duty. As such, extended period of limitation cannot be invoked in the present case. In this case it is a fact on record that during the course of investigation, no shortage or excess of the goods were found in the premises of the Appellant. In that circumstance, duty is cast on the Revenue to ascertain the fact that if the Appellant has not received the goods, then from where they procured the goods and used the same for manufacture of dutiable finished goods which have been cleared on payment of duty. Moreover, the Department has relied upon the statements of the transporters, but opportunity to cross-examine them to ascertain the truth has not been given. I therefore hold that the impugned order for disallowance of credit to the Appellant is not sustainable. Accordingly, the demands are set aside. In the peculiar facts and circumstances of this case and in the absence of cogent evidence, the demands are not sustainable, as a consequence the penalties imposed upon both the Appellants are also not sustainable and are accordingly set aside.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The present Appeals have been filed by the Appellants assailing the order of the Ld.Commissioner(Appeals).
Please become a Premium member. If you are already a Premium member, login here to access the full content.
