In Excise Appeal No. 79047 of 2018 – CESTAT - CESTAT (Kolkata) says that disallowing Cenvat Credit when actual receipt of goods was not disputed, is not correct
Member Rajeev Tandon (Technical) [18-05-2023]

Read Order: Marco Blowers (India) Pvt. Ltd v. Assistant Commissioner, Central Excise

LE Correspondent

Kolkata, May 20, 2023: The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal has ruled that since the impugned goods were properly accounted for in the statutory records, with payments made and transportation details indicated in the invoices, and there was no evidence to suggest non-receipt of goods by the Marco Blowers (India) Pvt. Ltd. (appellants), Cenvat Credit cannot be denied.

In the present case, the appellant was a manufacturer exporter of agricultural machinery. The appellants contended that they placed orders for goods with an unregistered dealer who, in turn, negotiated with a registered dealer to supply the goods to the appellants. The registered dealer directly supplied the goods to the appellants at their factory premises, mentioning the name of the buyers (unregistered dealer) and indicating the appellants as the consignee in the invoices. The appellants claimed that the Cenvat Credit availed by them based on the invoices of the registered dealer was valid, as the goods were received directly at their site. On the other hand, it was alleged by the department that the appellant had obtained Cenvat Credit based on invoices for which they did not actually receive the goods. The department argued that the appellant had wrongly availed Cenvat Credit using eight invoices issued by a registered dealer.

The bench of Rajeev Tandon (Technical) said, “The department’s contention of mere receipt of documents and no goods were supplied is without even a toehold of substance. It is at best only presumed or assumed that the appellants had not received the said goods as per the said cenvatable invoices issued. There is no sound basis to allege so and harbor such a belief by the department.”

The bench referred to the case of Apollo Metalex PVt. Ltd. V. CCE & ST [LQ/CESTAT/2015/96], wherein the Tribunal held that it was not correct to disallow credit on the strength of invoices issued by unregistered dealer (intermediate supplier), when actual receipt of goods was not disputed.