Order date – 15 December 2022

Facts –

• The Appellant, M/s. AIC Iron Industries Private Limited, is engaged in manufacturing of MS Ingot falling under Chapter Heading 7206 of the Central Excise Tariff Act, 1985. They are holding Central Excise Registration and are availing CENVAT Credit in respect of inputs used in the manufacture of final products.
• A Show Cause Notice was issued to the Appellant and its Director alleging wrong availment of CENVAT Credit on MS Round Cutting during the period from December 2012 to January 2013.

Issue –

• Whether the Appellant had availed irregular CENVAT Credit as arrived by the Department holding that it was paper transaction without receipt of raw materials? Whether under the circumstances and the facts on record, extended period of limitation can be invoked?

Order –

• The Tribunal finds 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. It was found 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.
• Tribunal also finds 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.
• 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.
• 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. As such, extended period of limitation cannot be invoked in the present case.
• Therefore the impugned order for disallowance of credit to the Appellant is not sustainable. Accordingly, the demands are set aside.