Non-Existent or Non-Goods Vehicle Numbers in Invoices alone cannot Deny CENVAT Credit: CESTAT
Merely because vehicle numbers mentioned in some of the invoices were not of transport vehicles, the said piece of evidence was not sufficient to deny Cenvat Credit, when there is evidence of receipt and utilization of inputs and no evidence of diversion of goods was discernible.
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata Bench, has held that merely on the basis of VAHAN portal data and statements of vehicle owners is insufficient to conclusively establish non-receipt of goods and cannot form the basis for denying CENVAT credit. The bench said that ‘It is a foregone conclusion that as long as the vehicle is identified, to...
The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Kolkata Bench, has held that merely on the basis of VAHAN portal data and statements of vehicle owners is insufficient to conclusively establish non-receipt of goods and cannot form the basis for denying CENVAT credit.
The bench said that ‘It is a foregone conclusion that as long as the vehicle is identified, to be of a non-commercial nature, the owner of the said vehicle will certainly assert its actual and non-commercial nature. Any enquiry therefore does not go into establishing the revenue’s charge.”
The appeal was filed by Super Shakti Metaliks Pvt. Ltd., Gagan Ferrotech Ltd. and its Director against the revenue for denying the CENVAT credit.
The notice issued to the appellant alleged that Gagan Ferrotech Ltd., a manufacturer of excisable goods under Chapter 72, had fraudulently availed CENVAT credit on billets and sponge iron during November 2010 to March 2011 without actual receipt of goods.
According to the facts, the Department’s allegation was based on enquiries conducted through the VAHAN portal. The portal showed that certain vehicle numbers mentioned in invoices were either non-existent or registered as non-goods vehicles.
Therefore, on this basis, the authorities concluded that transportation of heavy raw materials was impossible and that the transactions were merely on paper. Thus, the apartment was denied credit of about ₹9.09 lakh and imposition of penalties.
As per the appellants claim, the purchases were made against valid central excise invoices, payments were effected through account-payee cheques and banking channels, and the inputs were duly recorded in statutory registers and utilised in the manufacture of finished goods cleared on payment of duty.
It was further contended that discrepancies in vehicle numbers were clerical in nature and that VAHAN portal data itself was not infallible, when digitisation was incomplete.
The appellants also questioned the evidentiary value of VAHAN portal printouts, asserting that the mandatory requirements of Section 36B of the Central Excise Act governing admissibility of electronic evidence had not been followed.
The appellate tribunal quoted important cases including Hiren Aluminium Ltd. Vs. Commissioner of Central Excise, Commissioner of Central Excise, Ludhiana Vs. Paramatma Singh Jatinder Singh Alloys Pvt. Ltd…etc.
In the above cases, it was held that merely because vehicle numbers mentioned in some of the invoices were not of transport vehicles, the said piece of evidence was not sufficient to deny Cenvat Credit, when there is evidence of receipt and utilization of inputs and no evidence of diversion of goods was discernible.
The bench of Technical member Rajeev Tandon, Technical member said that the order of tribunal lacked legal merit. It set aside the order denying the CENVAT credit. The appeal was allowed accordingly.
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