Case Law Details
M/s. C.P.C. (P) Ltd. Vs Commissioner of GST & Central Excise Coimbatore (CESTAT Chennai)
The very variation in the description of the goods in the dealers’ invoice, as well as the material inward notes, cannot be a ground for alleging that the appellant has availed fraudulent credit. There is no allegation with respect to the difference in the quantity of the goods received. It is only with regard to the variation in the description of the goods in the dealer’s invoice. It is also important to note that though the department has relied upon the statement of Shri Selva Lakshmanan, the said person has not been put to cross-examination even though the appellant had requested for the same. Taking into consideration all these facts, I am of the view that the demand cannot sustain.
FULL TEXT OF THE CESTAT JUDGMENT
Brief facts are that the appellants are engaged in the manufacture of cast articles of iron and steel and are having Central Excise registration. They are availing the facility of CENVAT credit of inputs, capital goods etc. They purchased inputs from central excise registered dealers under CENVAT credit scheme and availed the credit of such inputs. Based on intelligence, the officers visited the factory of the appellant and verified the CENVAT account and related documents. With regard to transaction with M/s. Kovai Scrap Traders, Coimbatore, a registered dealer of iron and steel scrap, it was noticed that for the period from 2005 – 06 to 2007 – 08, for about 24 invoices, there was variation in the product description in the dealers invoice and the Material Inward Notes (MIN) maintained by the appellant. Statement of Shri Selva Lakshmanan, partner was also recorded. Based on such evidence, the department was of the view that the appellant had availed fraudulent credit of inputs. Show cause notice was issued for demanding an amount of Rs.2,78,814/- and also proposing to impose equal penalty under section 11AC of the Central Excise Act, 1944. After due process of law, the original authority confirmed the demand, interest and penalties. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellant, ld. consultant Shri R. Balagopal submitted that the demand has been raised by the department alleging that there is difference in the description of goods in the dealer’s invoices and the MIN. The appellant had placed purchase order for CI borings and the dealer had supplied CI borings. Instead of noting in the dealer’s invoice the goods as CI borings, the dealer had mentioned the goods as waste and scrap. He argued that CI borings fall within the very same Tariff heading as of waste and scrap and there is no separate Tariff heading for CI borings. The goods are generally known as waste and scrap and in specific it may be known as CI borings. Since the appellant had placed purchase order for CI borings and had received CI borings, the same was noted in the MIN. Only for the difference in the description of the goods, the demand has been raised. He adverted to the relevant Tariff regarding waste and scrap under 72044900 and submitted that the rate of duty for such waste and scrap is 8%. There is no separate heading for CI borings and therefore the appellant does not gain anything by the difference in the description of the goods. With regard to the statement of Shri Selva Lakshmanan, partner, he submitted that the said dealer had merely stated that he had not supplied CI borings but waste and scrap. Although the appellant requested for cross-examination of this witness, the same was not allowed. That therefore his statement cannot be relied on evidence. Further, even by his statement, it is not seen that the appellant had availed fraudulent credit. He prayed that the impugned order may be set aside.
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