The Principal bench of New Delhi Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that allegation against supplier was proved not true and set aside the order denying cenvat credit to the buyer.
The appellate, M/s KEI Industries Ltd., is engaged in the manufacture of electric wires and cables and winding wires of copper. The appellate purchased copper ingots from M/s V.K. Metal Works and sent them directly to its job workers for converting them into copper wire rods. It received and used the wire rods to manufacture electric wires and cables. The appellate availed Cenvat credit on the invoices issued by VKM after following the proper procedures.
Directorate General of Central Excise Intelligence collected information, investigated, and came to the conclusion that VKM had issued invoices without receiving any raw material and without manufacturing and supplying copper ingots. Show cause notices were issued to both VKM and its buyers including the assessee denying Cenvat credit availed on the basis of the invoices issued by VKM.
Tribunal observed that it had already decided, that the allegation is not true and VKM had manufactured copper ingots. Therefore, no basis remains for denial of Cenvat credit to the appellant herein. Consequently, the imposition of penalty upon the appellate and Sri Anil Gupta, Director of the appellate also cannot sustain.
The Coram of Mr. Justice Dilip Gupta, President, and Mr. P.V. Subba Rao, Member (Technical) has held that “we find that the impugned order dated 26.09.2013 cannot be sustained. The impugned order is, accordingly set aside”.
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