Order date – 22 November 2022

 Facts –

• The Appellant, M/s. New Modern Technomech Private Limited is engaged in the manufacture of Galvanized Steel Tower, Transmission Line Towers, H.T. Stay Sets, L.T. Stay Sets, Clamps and Structural materials etc. The Appellant used various inputs and one among them is Furnace Oil.
• During the month of September 2012, the Appellant purchased 15,711 Kilo Litres of Furnace Oil for an amount of Rs.7,28,978/- from one of the vendors viz. M/s.Sri Kamala Udyog and availed Cenvat credit.
• Show Cause Notice dated 27.01.2016 was issued on the ground that M/s. Sri Kamala Udyog has no existence and no plant and machinery are there in their declared premises and they are not performing any manufacturing activities. It is alleged that said M/s.Sri Kamala Udyog had undertaken only paper transactions and issued fake Central Excise invoices.
• Being aggrieve the appellant had filed an appeal.

Issue –

• Whether the Appellant can be denied CENVAT Credit on Furnace Oil ? 

Order –

• The Tribunal state that the Appellant is in possession of the Cenvatable invoice which satisfies all the conditions of the Rule 9(1) of the CENVAT Credit Rules, 2004, confirming to the requirement under Rule 11 of the Central Excise Rules, 2002 read with Rule 9 of the CENVAT Credit Rules, 2004.
• The Tribunal relied on the decision of the Hon’ble Allahabad High Court in the case of Commissioner of Central Excise, Csutoms & Service Tax Vs. Juhi Alloys Ltd. wherein it was held that the assessee has taken reasonable steps to ensure that the inputs in respect of which he has taken CENVAT Credit were goods on which appropriate duty of excise was paid. Once, it is demonstrated that reasonable steps had been taken which is a question of fact in each case it would be contrary to the Rule to cast impossible and impractical burden on the assessee.
• It would be unreasonable and unrealistic to expect the buyer of such inputs to go and verify all the supplier or to find out from the department of Central Excise whether actually duty has been paid on the inputs by the supplier.
• The Tribunal also finds that Central Excise Registration granted to M/s. Sri Kamla Udyog is bonafidely issued by the departmental authorities. Invoice was issued to the appellant by M/s. Sri Kamla Udyog fulfilling all the requirements of Central Excise Rules. Therefore, it further strengthens the Appellant’s contention that M/s. Sri Kamala Udyog existed on 30.07.2013 even.
• Hence the appeal is allowed.