Excise Dept. Fails To Prove Non-Receipt of Goods, Cenvat Credit Rightly Claimed by Manufacturer: CESTAT

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the manufacturer has rightly claimed the cenvat credit as the excise department failed to prove non-receipt of goods.

The bench of Ashok Jindal (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that the appellant manufacturer has correctly taken the cenvat credit on the invoices issued by second sage dealer accompanying the goods and in the absence of any evidence placed on the record by the revenue that if the manufacturer has not received the goods then from where they procured the inputs to manufacture the final products on which they have paid the duty.

The appellant/assessee is in the business of manufacturing of M/s. Ignots, Angels, Channels, Flats and rounds falling under Chapter 72 of the first scheduled to the Central Excise Tariff Act, 1985 on the basis of invoices (goods less) of first stage dealers and who had issued those invoices on the basis of non-existent manufactures. As a result, a case of wrong availment of cenvat credit on the basis of invoices without actual movement of goods was booked the appellant.

The appellant contended that there is no evidence that the Ganpati Enterprises, Dhanbad is a non-existent manufacturer neither there is any investigation report of any authority nor there is any statement of any person in this regard. Only statements of some non relevant persons have been relied upon which are in the nature of third party evidence therefore the statements are not admissible.

The department contended that the 7 show cause notices were issued but only one appellant has come forward. The manufacturers who were shown as manufacturer of the inputs have not paid duty, in that circumstances, cenvat credit is not available to the appellant. On the basis of the invoices issued by the second stage dealer. The cenvat credit cannot be allowed.

The tribunal held that manufacturer is entitled to take cenvat credit on the basis of the invoices issued by the second stage dealer along with inputs and all the requirements of the invoices has been fulfilled in terms of Rule 9(2) of the Cenvat Credit Rules, 2004 which were found to be correct in the invoices issued by the second stage dealer and the manufacturer has made payment through account payee cheque. In that circumstances, it cannot be said that in the absence of any supporting evidence, that manufacturer has not received the goods in the factory premises.

Case Details

Case Title: M/s. Nirmal Inductomelts Private Limited Versus Commissioner of Central Excise And CGST, Jaipur – I

Case No.: Excise Appeal No. 51633 Of 2022

Date: 08.05.2025

Counsel For Petitioner: B. L. Sharma, Consultant and Ms. Priyanka Goel, Advocate

Counsel For Respondent: Bhagwat Dayal, Authorized Representative

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