Order Date: 17 August 2022

Facts-

• The Appellant, M/s Vipul Copper Pvt. Ltd. are engaged in the manufacture of Copper Rods/Wires etc. they were availing of the benefit of Cenvat credit facility.
• The scrutiny of records/ documents reveal that Appellant had availed the Cenvat Credit mainly on the strength of invoices of M/s Pranav and M/s Omkar, the registered dealers. The investigation by DGCEI revealed that such imported consignment of copper never reached the dealers of Gujarat and Daman and credit was availed by them on the strength of only bills of entry/invoices and bogus LRs were prepared while the goods were sold in or around Delhi only.
• The Show cause notice was issued which culminated in the adjudication order whereby the demand of Cenvat credit along with interest and penalty was confirmed and a penalty under Rule 26 of Central Excise Rules, 2002 was also imposed on the Co-Noticees.
• Being aggrieved, Appellants filed appeals before the Commissioner (Appeals), who has dismissed the same vide impugned order. Hence, appellants filed these appeals before the Tribunal.

Issue-

• Whether appellant are eligible to Cenvat credit on the basis of invoices of dealers which are claimed to have been received along with inputs?

Order-

• The Tribunal observed that Revenue did not find any shortage/excess of inputs or finished goods in the Appellant factory. Officers also seized records/ documents related to the receipt of the goods and availment of cenvat credit. The Revenue could not bring any evidence from the Appellant’s factory by which it can be shown that the goods covered under the invoices were not received by them.
• In the rules, it is provided that credit can be taken on the basis of invoices after the inputs covered by such invoice is received. It is important that goods covered by the invoices are received by the manufacturer in their factory. 
• Further, the department nowhere raised any dispute on the said records. Thus, the contention of the department that appellant have availed cenvat credit without receipt of goods (raw material) is not tenable. 
• Further, as the Appellant have discharged the Central Excise duty on the final product manufactured out of the alleged raw material, if the department is of the opinion that the alleged goods was not received by the appellant then it is the onus on the department to prove that any other alternative raw material was used in the final products, department has failed to do so.
• The Tribunal also relied on the case of M/s. Ajay Industrial Corporation v. CCE, Delhi - 2009 (237) E.L.T. 175 (Tri.-Del.) and also M/s. Shree Jagdamba Castings (P) Ltd. v. CCE, Bhopal, 2006 (206) E.L.T. 695. Similarly, in the case of M/s. Malerkotla Steels & Alloys Pvt. Ltd. v. CCE, Ludhiana, 2008 (229) E.L.T. 607 (Tri.-Delhi), it was held that a manufacturer cannot be denied the credit on the ground that registered dealer had not received the inputs.
• The Tribunal held that the allegation of the Revenue that the appellant have not received the inputs made against the appellant are not sustainable and thus, the impugned orders are liable to be set aside.
• Accordingly, the appeals are allowed with consequential reliefs.